July 29, 2026/CSL Report
Okomu Oil Plc reported a marginal decline in top-line performance during H1 2026, with Revenue falling by 3.5% year-on-year (y/y) to ₦125.3 billion from ₦129.8 billion in H1 2025. The softer performance was primarily driven by lower domestic prices for crude and refined palm oil, reflecting increased import supply following the Federal Government’s reduction of import tariffs on palm oil products from 35% to approximately 27% earlier in the year.
In addition, the appreciation of the Naira against the US dollar further improved the economics of imports, exerting downward pressure on domestic prices. Revenue remained heavily concentrated in the domestic market, with local sales accounting for approximately 88% of total Revenue, while export sales contributed the remaining 12%.
On a quarter-on-quarter (q/q) basis, however, Revenue increased by 12.5% to ₦66.3 billion from ₦59.0 billion in Q1 2026, likely reflecting stronger sales volumes amid resilient domestic demand. Cost of Sales (excluding depreciation) increased by a modest 2.6% y/y to ₦41.3 billion in H1 2026 from ₦40.2 billion in H1 2025. On a quarterly basis, Cost of Sales surged by 209.9% q/q to ₦31.2 billion from ₦10.1 billion in Q1 2026, significantly outpacing the growth in Revenue over the same period.
The sharp increase in production costs was likely driven by a combination of factors, including higher input costs for Fresh Fruit Bunches (FFB) and rubber lumps, increased maintenance expenses for mature plantations, and the company’s ongoing replanting programme for ageing palm trees. Consequently, Gross Margin contracted sharply by 30.0 percentage points, declining from 82.9% in Q1 2026 to 53.0% in Q2 2026.
Financial Highlights:
- Revenue: -3.5% y/y to ₦125.3bn
- Cost of Sales: +2.6% y/y to ₦41.3bn
- OPEX: +12.2% y/y to ₦20.8bn
- EBITDA: -11.1% y/y to ₦63.2bn
- Operating Profit: +12.4% y/y to ₦59.9bn
- Profit After Tax: +16.4% y/y to ₦39.7bn
Stock Rating: Sell
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