…proposes N6.80 per share as final dividend
Presco Plc, one of the nation’s leading agro-allied firms based in Edo State, south-south Nigeria, announced its much awaited audited financial statements for the period ended 31 December 2022 on Monday.
The audited report showed mixed results across the top and bottom lines. While gross revenue increased, profit after tax fell, manifesting the impact of a huge rise in the company’s cost of sales, administrative expenses as well as finance cost.
According to the firm, its principal activities are the development of oil palm plantations, palm oil milling, palm kernel processing and vegetable oil refining, leading to products that are refined bleached and deodorized palm oil, palm olein, palm stearin, palm fatty acid distillate, palm kernel oil (crude and refined) and palm kernel cake.
Presco is owned by SIAT SA (Ultimate Holding Company) which controls 60 percent stake in the company, and 20450 ZPC/SIPML RSA Fund II-Main A/C, which owns 7.25 percent of its shares outstanding.
Presco realised N81.03 billion as revenue in 2022 from both local sales and export, representing an increase of 70.9 percent over N47.43 billion generated as revenue as of December 2021.
By product line, N80.99 billion of the revenue Presco generated in 2022 came from the sales of crude and refined products, followed by the sale of Fresh Fruit Bunches (FFB) where it made N38.70 million and from the mill by-products where it generated N4.29 million.
In 2021, sales of crude and refined products generated N47.40 billion while the sales of Fresh Fruit Bunches fetched N21.78 million and mill by-product generated N3.07 million.
In terms of markets, Presco realised N78.95 billion from the domestic market (Nigeria), representing 97.4 percent of its total earnings in 2022, compared to 2021 where all its earnings were made within the domestic market.
Cost of sales in 2022 rose by 98.14 percent to N31.06 billion as against N15.67 billion in the previous year. The upsurge in Presco’s cost of sales was attributed to the cost incurred during mill process, refinery and packaging, which gulped N12.19 billion in 2022, amounting to 39.2 percent of the total cost of sales incurred in 2022. In 2021, the mill processing, refinery and packaging cost was N5.51 billion, representing 35.2 percent of the total cost of sales in the previous year.
Notwithstanding, gross profit increased by 57.4 percent to N49.97 billion in 2022, as against N31.75 billion in the previous year.
Sustaining a 117.90 percent increase in administrative expenses, and another 229.14 percent rise in finance cost which effectively brought its administrative expenses to N20.36 billion in 2022 in contrast to N9.35 billion in 2021 as well as finance cost, which hit N8.49 billion in 2022 compared to N2.58 billion in the previous year, Presco’s profit before tax declined by 24.9 percent to N19.81 billion in 2022 down from N26.38 billion in 2021.
The firm paid more interest on loan, bond and overdraft, a manifestation of the higher interest rate regime pursued by the Central Bank of Nigeria, which is its policy response to the rising inflation, and hawkish stance by central banks in North America, Europe, and other advanced nations.
Profit after tax slid by 32.5 percent to N13.03 billion in 2022 down from N19.32 billion in 2021.
The company’s directors have proposed a final dividend of N6.80 per share subject to shareholders’ approval at its next Annual General Meeting (AGM) and deduction of withholding tax. If approved, Presco’s total dividend for 2022 will rise to N8.80 per share, having paid an interim dividend of N2 per share.
In continuation of its corporate social responsibility, the firm made donations of N58.24 million to different organisations in the course of the financial year that ended December 2022. Some of the beneficiary institutions were the Oghareki Traditional Council, N11.4 million; Edo State Skill Development Agency, N3 million; UNIBEN Anniversary, N5 million; Abraka Community Project, N5.52 million, National Women League Edo, N1.5 million, among others.
