July 25, 2025/Cordros Report
Okomu Oil Palm Plc (OKOMUOIL) published its Q2-25 unaudited financials yesterday (July 24), reporting a standalone EPS of NGN27.05 in Q2-25, representing a substantial 404.4% y/y increase from the prior year (Q2-24: NGN5.36). This brings H1-25 EPS to NGN49.83 (H1-24: NGN21.17), supported by substantial revenue growth.
Revenue grew by 127.5% y/y in Q2-25 (H1-25: +73.1% y/y), primarily driven by broad-based sales growth – local (+136.7% y/y | 92.3% of revenue) and export (+55.4% y/y | 7.7% of revenue). The topline performance was underpinned by stronger Crude Palm Oil (CPO) prices (Q2-25 CIF Rotterdam average: USD940.21/mt vs USD841.30/mt in Q2-24), driven by lingering supply constraints. Accordingly, on a q/q basis, revenue increased by 23.4%.
Gross margin expanded by 25.71ppts y/y to 61.8%, reflecting a slower rise in the cost of sales (+36.0% y/y | Q2-24: +172.3% y/y) relative to topline growth. The observed cost moderation reflects improved operational efficiency and proactive cost management, supported by a more stable naira and easing inflationary pressures, particularly in fertiliser-related inputs. Consequently, EBITDA (+29.48ppts y/y) and EBIT (+31.34 ppts y/y) margins expanded to 51.2% and 49.3%, respectively, despite a 56.7% y/y uptick in operating expenses. The increased OPEX is likely linked to operational scale-up expenses to support growing production volumes.
OKOMUOIL recorded a net finance cost of NGN515.52 million in Q2-25 (vs net finance income of NGN570.65 million in Q2-24), driven primarily by a sharp 89.0% drop in exchange loss to NGN297.17 million (Q2-24: NGN2.70 billion), further supported by a mild climb in interest on long-term loans (+0.3% y/y to NGN203.62 million), despite higher bank charges (+67.9% y/y to NGN45.90 million).
Ultimately, profit before tax increased by 458.9% y/y to NGN34.85 billion in Q2-25 (Q2-24: NGN6.24 billion). Following a tax expense of NGN9.05 billion (Q2-24: NGN1.12 billion), profit after tax came in at NGN25.80 billion (Q2-24: NGN5.11 million).
Comment: OKOMUOIL delivered a strong Q2-25 performance, driven by favourable pricing conditions amid stable volumes. Over the rest of the year, we anticipate steady resilience, supported by strong domestic pricing dynamics, sustained cost efficiency, and a more stable currency environment, which should keep exchange rate losses at bay. That said, we highlight the risk of softer global CPO prices in H2-25, driven by recovering supply from Southeast Asia and weaker global demand, which may dampen revenue momentum. Our estimates are under review.
