Presco Nigeria Plc, a leading agro-industrial company, has achieved a milestone with a significant profit increase in the first half of 2024. The company announced a net profit of ₦38.88 billion for the January to June period, a remarkable 158% increase compared to the ₦15.08 billion recorded in the same period of 2023.
The strong performance of oil palm companies in Edo State underscores the vast, underutilized opportunities in Nigeria’s oil palm sector. It also affirms the efforts of the Edo State Government, which has prioritized investments in this industry over the past six years through its Edo State Oil Palm Programme (ESOPP).
Governor Godwin Obaseki of Edo State explained the initiative:
“To begin, we focused on high-value crops like oil palm, rubber, and cocoa due to their investor appeal. After conducting a forest audit, we identified large tracts of deforested land suitable for oil palm cultivation. This led to the creation of the Edo State Oil Palm Programme (ESOPP). It’s not just about allocating land but providing comprehensive support—surveying, community engagement, compensation, and facilitating access to planting materials. Today, the program boasts over 70,000 hectares of plantations, with contributions from 7 to 8 investors.”
In the first half of 2024, Presco generated ₦88.02 billion in revenue, marking an 83% increase from ₦48.07 billion in the same period of 2023. With a cost of sales of ₦22.43 billion compared to ₦16.18 billion in the prior year, the company achieved a gross profit of ₦65.59 billion for the period ending June 30, 2024. This is a significant improvement from ₦31.89 billion in gross profit during the same timeframe in 2023.
Presco’s pre-tax earnings for the first half of 2024 amounted to ₦50.44 billion, compared to ₦20.89 billion in 2023. After deducting tax expenses of ₦11.56 billion, the company reported a net profit of ₦38.88 billion, outperforming the ₦15.08 billion achieved in the previous year.
Interestingly, Presco’s revenue for this period was generated entirely from the Nigerian market. Sales of crude palm oil and refined products accounted for ₦88.01 billion of the revenue, a significant increase from ₦48.06 billion in the previous year. However, the mill-by-products segment generated just ₦6.10 million, a 62% decrease compared to ₦16.06 million in 2023.
Presco operates as a fully integrated agro-industrial business, encompassing oil palm plantations, palm oil mills, kernel crushing plants, and vegetable oil refining facilities. Its operations also include packaging plants for olein and stearin, as well as a biogas plant for processing palm oil mill effluents. The company’s cost of sales reflects its commitment to maintaining mature plantations and managing harvesting and labor costs, which account for over half of the expenses.
Ownership of Presco is divided between Siat Group, which holds a 60% stake, and Nigerian investors (institutional and private), who own the remaining 40%.
