Presco Plc Unaudited FY 2024: Stellar FY 2024 Performance

Image Credit: farmlandgrab.org

February 3, 2025/CSL Research

Presco Plc (PRESCO) in its unaudited FY 2024 results reported a robust 93.5% y/y growth in Revenue, reaching N198.15bn from N102.42bn in FY 2023, surpassing our FY2024 estimate of N167.2 bn by 18.5%. Also, Revenue was up by 71.6% q/q, to N69.59bn in Q4 from N40.55bn in Q3, despite Q4 being a general off-peak season for CPO players. The remarkable Revenue growth seen was primary driven by steady increase in local demand for crude palm oil (CPO) across both industrial and household segments, along with higher sales of mill by-products, fresh fruit bunches (FFB), and both crude and refined products. Price adjustments in response to the Naira’s depreciation also contributed, with average domestic CPO prices peaking at N1.5 million/Metric ton (vs N1.1 million in 2023).

Presco Plc recorded a 68.7% year-on-year (y/y) increase in Cost of Sales, rising to N63.06 billion from N37.39 billion in the same period of 2023. The surge was even more pronounced in Q4 2024, with costs climbing 97.7% to N26.98 billion from N13.65 billion in Q3 2024. Despite higher costs, the company’s Gross Margin improved to 68.2%, up from 63.5% in FY 2023. Gross Profit also saw significant growth, rising 107.7% y/y to N135.1 billion from N65.03 billion. On a quarterly basis, Gross Profit increased by 58.4%, reaching N42.6 billion in Q4 2024, up from N26.89 billion in Q3 2024

Despite the challenging high-cost business environment, Presco Plc managed to absorb cost pressures, limiting the rise in Operating Expenses (Opex) to 21.6%, reaching N27.45 billion from N22.57 billion in FY 2023.The company also recorded strong growth in its EBITDA margin, which increased by 12.9 percentage points to 54.3%. Overall, Presco Plc reported a substantial 153.5% year-on-year increase in Operating Profit, reaching N107.64 billion in FY 2024.

PRESCO reported a significant increase in Finance Income, which rose to N2.68bn in FY 2024 from N48m in FY 2023, which was primarily driven by higher interest earnings on the company’s call and fixed deposit balances. Meanwhile, Finance Costs, which include interest expenses on loans and overdrafts, increased by 38.9% y/y to N12.75bn, up from N9.18bn in the previous year. The company also reported a 40.4% rise in foreign exchange (FX) gain to N6.16bn, compared to N4.39 billion in FY 2023.

On the balance sheet front, Presco Plc demonstrated robust growth, with total assets surging 147.7% year-on-year to N422 billion. This increase was primarily driven by significant growth in Property, Plant & Equipment, Biological Assets, and Cash Equivalents, which rose by 61.3%, 219.9%, and 218.6%, respectively. The company also reduced its long-term borrowings by 16.8% to N47.97 billion, while short-term borrowings saw a sharp 219.2% y/y increase to N8.83 billion. Notably, Trade and Other Payables grew substantially by 872.9% to N142.1 billion, largely due to outstanding amounts owed to sundry creditors, which are expected to be settled within a year.

Presco Plc reported a remarkable Profit After Tax (PAT) of N104.28 billion in FY 2024, marking a 217.3% y/y increase. On a quarterly basis, PAT surged 307.5% to N52.51 billion in Q4 2024, up from N12.9 billion in Q3 2024. A key driver of this growth was the 102.9% y/y increase in Gain on Biological Asset Revaluation, which rose to N24.84 billion, significantly boosting earnings. Excluding this revaluation gain, PAT stood at N79.44 billion, compared to N20.62 billion in FY 2023.

We maintain a Buy recommendation on Presco with a price target of N683.1/s. Current price is N585/s

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

Presco Unaudited FY2024 – Quick Take.pdf

Leave a Comment

Your email address will not be published. Required fields are marked *

*