Naira boosted palm oil profits to 10-year high

 Presco Plc and Okomu Oil, Nigeria's leading palm oil producers, have reported a remarkable 95 percent increase in profits, marking their highest surge in a decade. BusinessDay's data reveals that their combined after-tax profit soared to N39.2 billion in the first quarter of 2024 from N20.1 billion in the same period last year.

In terms of revenue, the companies experienced substantial growth, with earnings climbing 86.9 percent to N86 billion compared to N46.2 billion in the previous quarter.

The Nigerian palm oil industry is currently flourishing due to heightened investments, growing demand, and increased market activity. However, Henry Olatunoye, former national president of the National Palm Produce Association of Nigeria (NPPAN), raised concerns about the impact of Naira devaluation on essential goods. He noted that the depreciation has significantly raised costs, making investments in Naira less appealing compared to more stable currencies such as the dollar.

Olatunoye highlighted the price dynamics within the industry, stating, "Last year, a metric tonne of palm oil sold for N950,000, but this year, prices range between N1.2 million and N1.3 million, with projections of reaching N1.5 million by September due to ongoing naira devaluation."

He further explained, "Seasonal fluctuations in production lead to increased palm oil consumption, causing prices to surge in Naira terms relative to the dollar."

Detailed analysis from Presco's financial report shows that the company generated N42.5 billion in revenue from sales of crude and refined products, with an additional N5.1 million from mill by-products in the first quarter of 2024.