… revenue justifies Edo commitment to attracting investment into oil palm sector
Okomu Oil Plc recorded robust earnings in 2022 as its revenue grew by 58.6 percent to N59.32 billion, up from N37.39 billion in the previous year, its latest audited financial report for 2022 has shown.
The company is in the business of cultivating oil palm, processing of fresh fruit bunches into crude palm oil for resale, rubber plantation, and processing of rubber lumps to rubber cake for export.
Interestingly, 90.6 percent of its 2022 revenue came from the sale of palm oil produce where the palm oil giant realised N53.75 billion amounting to an increase of 69.2 percent when compared to N31.766 billion the firm realized in 2021.
Okomu Oil attributed the improved earnings in the financial year that ended 31 December 2022 to cost cutting measures, as well as hike in commodity prices to offset the impact of Nigeria’s inflationary pressures which maintained an upward trend throughout last year.
“In an effort to reduce the negative impacts of the attendant economic challenges, the company minimized its costs, through the utilization of its newly fully commissioned 5mw turbine as an alternative means of generating power in 2022, and it produced over 44% of the power required in the company’s main estate.
“This enabled the company to reduce its carbon footprint. Additionally, both 30t/hr oil mills were fully commissioned in Extension 2 by the end of 2022, helping to reduce transportation costs and preventing a decline in CPO quality owing to double handling and high FFA.
“Despite the ongoing instability, both within and outside of the country, the commodity prices of both of our company’s products increased in 2022, which, to a degree helped to offset the huge inflationary increases being experienced by businesses in 2022,” Gbenga Oyebode, chairman, Okomu Oil Plc, said.
Other sources of revenue include rubber sales, and palm oil processing. In 2022, revenue from rubber sales declined marginally by 1.2 percent to N5.49 billion when compared to N5.56 billion realized in the previous year.
“A total of 6,025ha of rubber was recorded at the end of 2022, of which all areas were mature. No new rubber plantings or replants were done in 2022. Dry rubber production reduced by 8.96% YoY, whilst rubber agricultural plantation costs increased by 88% when compared to 2021. The rubber factory processing of dry rubber was 12% less when compared with the prior year,” he added.
Earnings from palm oil processing rose by 21.9 percent to N78.18 million in 2022, as against N64.13 million realized in 2021.
Profit after tax for the period increased by 40.7 percent to N16.23 billion in 2022 compared to N11.54 billion in the previous year. However, profit margin reduced to 27.4 percent in 2022 as against 30.9 percent in 2021.
It should be recalled that the significant improvement in Okomu Oil’s revenue in 2022 justified the commitment of the Godwin Obaseki-led administration in Edo State. Thus far, the Edo State Government has attracted over $500 million worth of investment into the state’s oil palm sector, through the Edo State Oil Palm Programme (ESOPP), which is expected to boost the nation’s diversification project.
According to the Edo State Government, ESOPP is expected to provide feedstock for the manufacturing companies in Nigeria.