July 28, 2026/Cordros Report
Okomu Oil Palm Plc (OKOMUOIL) published its Q2-26 unaudited financials today, reporting a 37.5% decline in standalone EPS to NGN16.91 (Q2-25: NGN27.05), reflecting a weaker revenue performance (-7.5% y/y) and EBITDA margin compression (-906bps y/y to 39.4%). As a result, H1-26 EPS declined by 16.4% y/y to NGN41.65 (H1-25: NGN49.83).
Revenue declined by 7.5% y/y in Q2-26 (H1-26: -3.5% y/y) as an 11.7% y/y decline in domestic palm oil sales (88.1% of revenue) more than offset a 42.9% y/y increase in export rubber sales (11.9% of revenue). We attribute the decline in domestic sales to lower realised prices, as persistent import-driven competitive pressures weighed on domestic CPO pricing during the period. On a q/q basis, revenue increased by 12.5%, supported by the seasonal improvement in oil palm production.
Gross margin contracted by 11.32ppts y/y to 50.5% in Q2-26 (H1-26: -252bps y/y to 64.4%), as cost of sales increased by 19.9% y/y despite lower revenue. The contraction reflects a combination of weaker realised palm oil prices and higher production costs, which weighed on profitability during the quarter.
Consequently, EBITDA and EBIT margins contracted by 11.86ppts y/y and 12.44ppts y/y to 39.4% and 36.9%, respectively (H1-26: -430bps y/y and -484bps y/y to 50.5% and 47.8%, respectively) notwithstanding a modest 0.7% y/y increase in operating expenses.
Below the operating line, OKOMUOIL recorded net finance income of NGN433.68 million in Q2-26 (Q2-25: net finance cost of NGN515.52 million), supported by higher finance income (+18.9x y/y) and a 65.7% y/y decline in finance costs to NGN187.75 million. In H1-26, net finance cost declined by 29.5% y/y to NGN954.9 million (H1-25: NGN1.35 billion).
Finally, profit before tax (PBT) declined by 28.6% y/y to NGN24.89 billion in Q2-26, while profit after tax (PAT) declined by 37.5% y/y to NGN16.13 billion. For H1-26, PBT declined by 11.9% y/y to NGN59.05 billion, while PAT fell by 16.3% y/y to NGN39.80 billion.
Comment: OKOMUOIL delivered another weak quarter, as the headwinds that emerged in Q1-26 persisted into Q2-26. Sustained import-driven competition continued to pressure domestic palm oil prices, constraining pricing power despite structurally resilient demand. Consequently, weaker realised prices weighed on revenue, compressed margins, and resulted in softer earnings during the quarter. Looking ahead, we expect these pricing pressures to persist over the remainder of the year, suggesting earnings are likely to remain under pressure despite continued growth in palm oil and rubber production volumes. Our estimates are under review.
