Nigeria’s largest palm oil producers are gaining from surging global Crude Palm Oil (CPO) prices, which have seen their net incomes jump to the highest on record.
Profits at both Presco and Okomu rose to N117.11 billion in the nine months to September 2025. That’s 113.6 percent higher than the N80.09 billion recorded in the corresponding period last year. The companies’ combined earnings for the first three quarters of this year were almost the same as their total net profit for the full year of 2024 at N117.74 billion.
“CPO prices rose across the globe and were higher compared to last year, as there was capacity expansion by these players. Presco, in particular, made several acquisitions that supported the topline,” said Kayode Eseyin, lead consumer goods and agricultural sector research at Lagos-based Cardinal Stone.
Global CPO prices are bullish, and there are forecasts that the prices will climb to $1,200 per metric tonne (MT) by the end of 2025, up from the current $1000.06/MT. The price rally is being driven by supply disruptions, intensified biodiesel demand in Southeast Asia, and easing trade tensions between major economies like the U.S. and China.
“With global supply tightening as Indonesia and Malaysia ramp up domestic biofuel mandates, Nigeria stands to benefit from elevated international prices and widening domestic supply gaps,” Afrinvest said in its 2025 Oil Palm Sector Update.
Read also: Why Okomu, Presco model should interest Imo, Cross River
In 2024, local palm oil prices surged 56.8 percent year-on-year to N420,906 per MT, reflecting the ripple effect of global price movements, naira devaluation, and imported input inflation. These tailwinds helped boost industry revenue by a staggering 90.2 percent to a record N337.7 billion, comprising N207.5 billion from Presco and N130.2 billion from Okomu.
The palm oil makers are also reaping from a stable macroeconomic condition, with inflation cooling for the seventh consecutive month to 16.02 percent, the strongest single-month disinflation seen this year and the lowest it’s been in three years, even as purchasing power remained weakened.
The naira, which weakened by over 40 percent in 2024, has strengthened by almost 10 percent this year, maintaining a rare stability not seen in recent years. Though the local currency depreciated by 1.5 percent week-on-week to N1,457.38/$ driven by strong demand from corporates seeking to leverage available liquidity to secure imports ahead of the festive season, analysts at Cordros expect the naira to remain largely stable as “FX liquidity remains robust.”
Presco to gain on expansion push
Presco is expected to gain from its acquisition of Ghana Oil Palm Development Company Limited (GOPDC) and Saro Oil Palm in a total deal worth $171.6 million in a race to meet its broader expansion strategy and deepen market penetration.
The deal, for which the company is partly raising N237 billion through a rights issue, is expected to boost the oil palm firm’s bottom line as well as its top line while strengthening its market reach.
“This Rights Issue marks a pivotal moment in Presco’s journey. It enables us to consolidate our leadership in the agro-industrial sector, fund strategic acquisitions, provide needed working capital, and reinforce our balance sheet to pursue local and international business expansions,” Reji George, MD/CEO of Presco Plc, said at the formal signing ceremony recently.
Read also: Presco targets N237bn from existing shareholders as Rights Issue commences
Okomu rides on low leverage to boost profitability
Okomu Oil continues to ride on its low leverage, an approach that’s helped the company cut down existing borrowings, with interest expense on loans declining by 9.7 percent year-on-year (YoY) to N579.7 million in 9M’25.
Analysts at CardinalStone see total finance costs, including lease liabilities, decline by 21.4 percent YoY to N3.6 billion by the end of this year and by another 33.2 percent to N2.4 billion in full-year 2026, assuming the entity maintains its conservative funding structure.
At the current rate, the analysts said the company is expected to pay down its existing loans by 2029. “The low leverage is expected to support margin expansion and profitability, with Profit Before Tax (PBT) margin forecast to increase by 8.2 percentage points (ppts) to 49.3 percent in FY’25E and a further 3.3 ppts to 52.6% in FY’26E.”
Profit streak seen growing in 2026, albeit slowly
Analysts at CardinalStone project that Presco’s profit will rise by 68.1 percent to N130.34 billion and Okomu’s to N75.76 billion by the end of the year. But the momentum with which earnings grew this year may begin to wane by 2026 as disrupted supply chains make way.
“I think profit will grow next year again, but the profit growth won’t be as significant as this year,” Eseyin said.
Oil palm stocks defy market sell-offs
Despite the recent sell-offs that saw the Nigerian Exchange suffer its biggest loss since 2015 and lose about 6 percent in value in four weeks, Presco and Okomu stocks remained resilient, highlighting heightened investor confidence.
Shares of Okomu have risen 9 percent over the past four weeks, making it the sixth-best on NGX. This is as the stock has seen its share price gain 150 percent to close trading on Friday at N1,100 per share. That means a N1 million investment in Okomu in January would be worth N2.5 million now.
That’s also the same with Presco, the biggest player in the industry, where its share price has surged by 205 percent year-to-date to close trading at N1,450 per unit. A N1 million investment in Presco’s stock would be worth N3.05 million today.
