Presco Grows Half-year Profit by 84% to N5.6 Billion


Presco Plc has raised shareholders hope for another bountiful harvest at the end of the current financial year following improved half year financial performance to June 30, 2017.

The fully integrated palm oil company, paid a dividend of 150 kobo per share for 2016 financial year following an impressive performance that saw profit after tax (PAT) soared by 772 per cent.

Presco on Wednesday released its results for H1 of 2017, showing a revenue of N12.825 billion, from N7.518 billion in the corresponding period of 2016. Cost of sales rose from N2.757 billion to N3.139 billion, while gross profit stood at N9.686 billion, showing an increase of 103 per cent from N4.761 billion in 2016.

Selling, general and administrative expenses jumped by 205 per cent from N772 million to N2.362 billion, while distribution expenses rose from N108 million to N148 million. However, fair value of biological assets rose by 67 per cent from N658 million to N1.102 billion.

The company, therefore ended the H1 of2017with a PAT of N5.555 billion, up 84 per cent from N3.012 billion in the corresponding period of 2016.

Gains on biological assets of N24.7 billion recorded in 2016, compared with N1.1 billion in 2015, had shot the PAT of the company from N2.5 billion to N21.7 billion. Hence, the directors recommended a dividend of 150 kobo per share for 2016, up from 100 kobo in 2015.

The Chairman of Presco Plc, Mr. Pierre Vandebeeck last month told shareholders of the company that for three years running there has been increasing challenges in the Nigerian business environment and the economy contracted in 2016 for the first time in two decades.

“In 2016, inflation rose to an 11-year high of 18.55 per cent in the last quarter of the year. There was no improvement in government revenue and monetary liquidity deteriorated. Forex availability worsened both in terms of scarcity and depreciation of the naira against major international currencies,” Vandebeeck said.

However, he noted that none of these complex challenges could limit Presco’s impressive performance.

The company’s success can also be attributed to its aggressive plantation policy. Presco, has three estates – Obaretin (7,000ha) and Ologbo (11,000ha) both in Edo state, and Cowan (2,800ha) in Delta state.

The three estates achieved production of fresh fruit bunches (FFB) 176,477 tonnes in 2015, about14,000 more than the previous year, and 164, 513 tonnes in 2016. The company recently started operations in Sakponba with the development of a nursery and is actively looking for new land to work with.