…Profit before tax increased by 80.6% y/y to N11.41 billion in Q3-24 (Q3-23: N6.32 billion).
…Following a tax expense of N3.27 billion (Q3-23: N1.60 billion), profit after tax came in at N8.14 billion (Q3-23: N4.72 billion), representing an increase of 72.5% y/y.
TUE OCT 29 2024-theGBJournal| OKOMUOIL Plc beat expectations for its earnings, despite posting a sharp 8.2% drop in its revenue for the third quarter of 2024.
Okomu Plc’s third quarter results saw it post growth of 72.5% y/y in Q3-24 standalone earnings per share (EPS) to N8.54 (Q3-23: N4.95), resulting in 9M-24 EPS of N29.71 (9M-23: NGN21.93).
The positive outturn in EPS was due to a surge in topline growth (+44.4% y/y) amid the significant uptick in finance income (+19.8x y/y).
Revenue grew by 44.4% y/y in Q3-24 (9M-24: +71.4% y/y) underpinned by growth across the export (+49.8% y/y | 54.2% of revenue) and local (+38.4% y/y | 45.8% of revenue) sales lines. We attribute the performance to the impact of naira devaluation on CPO prices.
However, on a quarter-on-quarter basis, revenue declined by 8.2% primarily due to a decline in local sales (-32.6% q/q), while export sales (+28.9% q/q) increased.
Gross margin contracted by 972bps y/y to 51.1% in Q3-24 (Q3-23: 60.8%) driven by the effects of significant cost pressures (+80.2% y/y) on the company’s operations.
We think the higher costs emanated from the impact of the marked currency devaluation on the cost of fertilizers amid the elevated inflationary environment.
However, EBITDA (+32bps y/y) and EBIT (+157bps y/y) margins expanded to 41.3% and 37.0%, respectively following the 19.8% y/y decline in operating expenses.
Further out, OKOMUOIL recorded a net finance income of N712.45 million in Q3-24 (vs net finance cost of N777.72 million in Q3-23) following a 19.8x y/y uptick in finance income.
The sharp growth in finance income was primarily driven by the substantial increase in exchange gain (+20.1x y/y to NGN2.02 billion).
Profit before tax increased by 80.6% y/y to N11.41 billion in Q3-24 (Q3-23: N6.32 billion).
Following a tax expense of N3.27 billion (Q3-23: N1.60 billion), profit after tax came in at N8.14 billion (Q3-23: N4.72 billion), representing an increase of 72.5% y/y.
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