Nigeria’s edible oil producer Presco reports 25% decline in profits

NIGERIA – Presco Plc, an edible oil processing firm in Nigeria, reported 25% decline in profits for the year ended December 31, 2018 to US$12.03 million (N4.284bn), down from US$16.08 million (N5.726bn) the previous year.

According to the company’s audited results, it ended the year with revenues of US$59.94 million (N21.344bn), down from US$62.81million (N22.365bn) in 2017.

During the period under review, the palm oil producing firm managed to cut down its cost of sales from US$16.68 million (N5.941bn) to US$13.35 million (N4.753bn), brining gross profit to US$46.59 million (N16.591bn), compared with US$46.12 million (N16.424bn) in 2017.

Selling and general administrative expenses were reduced to US$17.93 million (N6.384bn) from US$20.18 million (N7.184bn).

However, loss on biological asset revaluation rose from US$0.97 million (N347m) in 2017 to US$7.39 million (N2.632bn) in 2018 while financing cost rose from US$2.73 million (N973m) to US$3.58 million (N1.276bn).

Presco, which specialises in cultivating oil palm and extracting, refining and fractionating crude palm oil, also recoded a decline in earnings per share from N5.68 to N4.30. 

Meanwhile, the company has also recorded a decline in bottom-line for the first quarter ended March 31, 2019 as revenue declined 16% to N5.506 billion compared to N6.590 billion in the corresponding period of 2018.

Net financing cost rose 86 per cent from US$0.81 million (N289m) to US$1.51 million (N539m), while profit after tax fell 17.6 per cent from US$7.29 million (N2.597bn) in 2018 to US$6.01 million (N2.140bn) in 2019.

Despite the decline in performance, the board of directors resolved to maintain the N2 per share dividend pay out for the year ended December 31, 2018.

Presco Plc is a subsidiary of Siat, a Belgian agro-industrial company which specialises in cultivating smallholder plantations of mainly oil palm and rubber tree crops.

Siat has a major stake in the Ghana Oil Palm Development Company (GOPDC) in Ghana, Siat Gabon in Gabon and Compagnie Heveicole de Cavally in Ivory Coast.

Currently, the firm has an oil palm plantations of 23,500 hectares and runs a palm oil mill with a capacity of processing 90 tonnes fresh fruit bunches/hour.

In addition, Presco boasts of refinery and fractionation plant with a capacity of 100 tonnes/day and an installed storage capacity for products of 10,000 tonnes.

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