April 30, 2024/CSL Research

Okomu Oil Palm Plc (OKOMUOIL) in its Q1 2024 unaudited results reported a robust 79.6% y/y growth in Revenue to N43.48bn from N24.21bn (Q1 2023). On q/q basis, it surged by 203.2%. This significant growth in the topline performance may have been driven by high demand for CPO locally and upward price adjustments, as we noticed local sales contributed 90.4% of the total sales recorded in the quarter while export sales contributed 9.6%. Also, global CPO price was up by 5.7% to US$822/tonne in Q1 2024.

Meanwhile, the Cost of Sales grew by 135.1% in the quarter to N10.33bn from N4.39bn in Q1 2023, which caused the company’s Gross Profit margin to marginally decline to 76.3% from 81.9% (Q1 2023). Gross Profit still maintained its uptrend, up 67.3% y/y to N33.16bn from N19.82bn (Q1 2023)

Operating Expenses (OPEX) rose 78.0% y/y to N8.33bn from N4.68bn in Q1 2023 and 243.5% rise q/q due to the current high-cost business operating environment. EBITDA was up 60.4% y/y to N24.8bn from N15.13bn (Q1 2023) though EBITDA Margin slipped to 57.1% from 62.5% in Q1 2023. The company reported no exceptional income in the quarter.

The company’s Finance Income increased by 45.5% to N1.69m from N1.16m in Q1 2023 due to higher interest on fixed deposit while its Finance Cost declined by 12.4% y/y, reaching N222m from N254m in Q1 2023, as its loan balance dropped by 4.6% to N8.63bn from N9.05bn as at FY 2023. Okomu recorded FX gain of N2.72bn and FX loss of N4.29bn in the quarter, bringing the Net FX loss balance to N1.57bn.

The business reported Pre-tax Profit of N23.03bn, up 54.8% compared with N14.88bn in Q1 2023 and a Profit After Tax of N15.08bn, up 46.2% y/y.

We retain a Buy recommendation on Okomu with a price target of N272/s. Current price is N232.5/s.

Kindly click on the below link to download the full report.

​Okomu Oil Q1 2024 Quick Take.pdf​