Okomu Oil Palm Plc suffered a net loss of roughly N714 million in the final quarter, which lowered its full-year profit from the third quarter figure of N18 billion to a little above N17 billion.
Despite the fourth quarter disappointment however, the oil palm and rubber producing company grew profit for the year by more than one-half above the closing profit of N11.5 billion the company posted for the 2021 full year.
The company has maintained outstanding profit growth for the third year running from N5.4 billion in 2019 to N7.8 billion in 2020 and from N11.5 billion in 2021 to N17.3 billion at the end of the 2022 financial year.
The company’s unaudited financial report for the year ended December 2022 shows a dismal earnings performance all through the second half. A profit drop of 41 per cent to N1.2 billion in the third quarter worsened to the loss of N713.6 million in the final quarter.
The second half therefore made a net contribution of only N486 million to the company’s full-year profit in 2022. The second half also accounted for N18.5 billion or 31 per cent of the full-year turnover of over N59 billion.
The main challenge that created the loss in the final quarter came from net operating expenses of about N3.8 billion which exceeded gross profit of less than N3.7 billion. The imbalance created an operating loss of N97 million for the quarter.
Net finance cost of N1.6 billion swelled the figure to a pre-tax loss of N1.7 billion while a tax credit of N988 million lowered it to an after-tax loss of N713.6 million for the quarter.
The company’s full-year numbers show sales revenue of N59.2 billion at the end of the 2022 trading. This is an outstanding growth of 58.4 per cent over the closing turnover figure of N37.5 billion for the 2021 full year.
Export sales reversed from over 91 per cent growth in 2021 and declined marginally to N5.5 billion at the end of the 2022 operations.
A more rapid growth in input cost than sales revenue was the company’s main challenge in the year.
Cost of sales rose ahead of sales revenue at 70 percent to stand at N19.8 billion at the end of the year.
Despite the incursion of input cost on sales revenue, gross profit still grew impressively at over 53 per cent to N39.4 billion at the end of December 2022.
Further pressure came from an increase of 60.5 per cent in net operating expenses, which closed at N14.4 billion for the year.
Operating profit still maintained an outstanding growth of over 49 per cent to N25 billion at the end of the year.
Despite more than three and half times a jump in finance expenses to N2.3 billion and a 22 per cent increase in tax expenses to N5.6 billion, the company still achieved an after-tax profit advance of over 50 per cent to N17.3 billion at the end of the year.
Okomu Oil Palm earned N18.17 per share at full-year operations, advancing from N12.10 per share in 2021.
A better than the N8 cash dividend per share the company paid for its 2021 operations is expected when the audited accounts are released.