The Okomu Oil Palm Plc in its fourth quarter 2023, unaudited results, reporting a standalone EPS of N0.26 against loss per share of N0.79 in fourth quarter of 2022,

bringing 2023 full year EPS to N22.19 against N18.17 in 2022 full year.

This was attributed to the improved earnings to the sturdy revenue growth in the period.

Revenue increased by 58.2% in fourth quarter 2023, underpinned by a broad-based increase across local and export sales.

Analysts highlight that the higher sales print was driven by the effect of the local currency devaluation on Crude Palm Oil (CPO) prices, which triggered an increase in local CPO prices.

Meanwhile, revenue came in lower on a quarter-on-quarter basis, declining by 58.5% on the back of weaker sales in local and export segments.

Gross margin declined to 39.7% in fourth quarter 2023 against 40.6% in fourth quarter 2022, as cost of sales grew by 60.5%, influenced by higher energy costs.

However, the operating margin grew by 21.70ppts to 22.8%, as OPEX-to-sales ratio fell to 16.9%.

Okomu Oil recorded a net finance income of N366.05 million in fourth quarter of 2023 against net finance cost of N1.89 billion in fourth quarter if 2022, following a significant increase in finance income amid a contraction in finance cost.

The higher finance income was facilitated by a substantial increase in exchange gain of N653.45 million against N23.09 million in fourth quarter of 2022.

Elsewhere, the contraction in interest on long-term loans and exchange loss triggered the movement in finance cost.

Overall, profit before tax settled at N3.63 billion in as against loss before tax of N1.70 billion in fourth quarter 2022.

Following a tax expense of N3.38 billion, profit after tax came in at N245.98 million as against loss after tax of N749.39 million in fourth quarter of 2022.

OKomu OIils performance was impressive, as it aligns with our anticipated outcomes, driven by higher pricing, amid a steady growth in volumes.

Analysts anticipate further improvement in the company’s earnings in 2024 full year, driven by top-line expansion supported by favourable factors such as the upside for Nigerian CPO planters, especially amidst foreign exchange liquidity challenges, which analyts believe will positively impact the company’s earnings.

Additionally, higher volumes, facilitated by the upgrade of the milling capacity at Okomu II, are expected to contribute to this growth.