Presco Plc’s 2025 full-year numbers tell the story of an agro-industrial company that has moved decisively into a higher earnings bracket, leveraging scale, pricing power, and regional expansion to deliver one of the strongest performances on the Nigerian Exchange in the past year.

The palm oil producer reported a profit before tax of N178.56 billion for the year ended December 31, 2025, a 57.3% jump from N113.53 billion in 2024, according to its unaudited financial statements filed with the Exchange on January 30, 2026. That growth came despite sharply higher costs, rising finance charges, and a more volatile operating environment, underscoring how far Presco’s earnings capacity has expanded.

At the heart of the performance was revenue, which surged by nearly 60% to N331.19 billion from N207.50 billion a year earlier. Almost all of that came from crude and refined palm oil sales, which contributed N330.94 billion, highlighting how central Presco’s vertically integrated palm oil value chain has become to its growth story. Higher volumes, firmer pricing, and increased refining output combined to lift top-line performance, even as inflation continued to push up input costs.

The strength of the year was particularly evident in the final quarter. After a softer third quarter that reflected seasonal factors and cost pressures, Presco posted a sharp rebound in the last three months of the year, effectively carrying full-year earnings. That late surge helped cement management’s confidence to propose a N72 billion dividend, reinforcing the company’s standing as one of the Exchange’s most consistent and generous dividend payers.

Operationally, the numbers point to strong leverage. Operating profit before finance costs rose by 70.1% to N214.39 billion, compared with N126.10 billion in 2024. Gross profit climbed 63.1% year on year to N228.21 billion. These gains show that Presco was able to grow earnings faster than costs, even as inflation, logistics challenges, and currency pressures continued to weigh on Nigerian manufacturers.

Net profitability was even more striking. Profit after tax jumped by 76.7% to N138.12 billion from N78.10 billion, pushing basic earnings per share to N134.38, up from N74.01 in the prior year. For equity investors, this combination of earnings growth and dividend expansion has significantly altered Presco’s valuation profile, shifting it from a steady agro-industrial stock into a clear high-growth income play.

That said, 2025 was not without pressure points. Costs rose sharply as the company expanded capacity and deepened its regional footprint. Cost of sales increased by 81.7% to N102.98 billion, reflecting higher fertilizer prices, energy costs, and general inflation across agricultural inputs. Administrative expenses rose by 48.8% to N53.72 billion, while selling and distribution costs nearly tripled to N4.02 billion as Presco invested more heavily in logistics, market development, and workforce expansion.

Finance costs were one of the fastest-growing line items, climbing to N43.62 billion from N12.79 billion in 2024. This jump was driven by higher borrowings, used largely to fund expansion projects and acquisitions. While this weighed on net margins, the impact was cushioned by strong operating cash flows and the sheer scale of earnings growth during the year.

The balance sheet expansion in 2025 was just as dramatic as the income statement. Total assets ballooned to N833.40 billion from N475.10 billion a year earlier, reflecting both organic growth and strategic transactions. A major driver was Presco’s decision to acquire the remaining minority stake in Ghana Oil Palm Development Company, taking its ownership from 52% to 100%. That move not only simplified the group structure but also gave Presco full control over one of West Africa’s key palm oil assets.

Current assets more than tripled, pointing to higher inventories, receivables, and cash balances as operations scaled up. Shareholders’ equity surged to N426.66 billion from N211.20 billion, supported by retained earnings and fresh capital raised through a rights issue. The capital raise strengthened financial flexibility, giving Presco room to invest in plantations, mills, and refining capacity without over-stretching its balance sheet.

Borrowings more than doubled to N18.04 billion from N8.90 billion, contributing to higher liabilities and explaining part of the rise in finance costs. Even so, leverage remains modest relative to earnings, suggesting the company still has headroom to fund further expansion if needed.

Geographically, Presco’s expansion across West Africa is beginning to show up in the numbers. Full control of Ghana Oil Palm enhances regional scale and positions the group to tap export markets more aggressively, particularly in Europe, where demand for sustainably sourced palm oil remains strong. This regional footprint also provides some insulation against localized shocks in Nigeria, although it exposes the company to broader currency and regulatory risks.

The dividend story remains central for shareholders. The proposed N72 billion dividend for 2025 marks another step up in payouts, following N42 billion paid for the 2024 financial year and roughly N26.3 billion distributed in 2023. Over three years, Presco has more than doubled its dividend payout, mirroring the rapid expansion of its profit base and reinforcing its reputation as a reliable income stock.

Overall, Presco’s 2025 results show a company that has successfully scaled its operations at a time when many manufacturers are struggling with costs and demand uncertainty. The challenge ahead will be sustaining this momentum as rising finance costs, ongoing inflationary pressures, and the execution risks that come with regional expansion will test management in 2026.

Still, with a stronger balance sheet, expanding assets, and a proven ability to convert growth into cash returns for shareholders, Presco enters 2026 from a position of strength rather than defense.

China’s manufacturing sector stumbled at the start of the year, reinforcing concerns that the economy is entering 2026 with weakening momentum and unresolved structural strains, even as policymakers intensify efforts to pivot growth toward domestic demand.

Official data released on Saturday showed the manufacturing purchasing managers’ index (PMI) fell to 49.3 in January from 50.1 in December, slipping back below the 50 mark that separates expansion from contraction, according to Reuters. The reading undershot market expectations of 50.0 and marked a clear reversal from the modest improvement seen at the end of last year, suggesting that factories are once again struggling to secure sufficient demand to sustain output.

The deterioration was evident across key sub-components. New orders dropped to 49.2 from 50.8 in December, pointing to a slowdown in domestic demand at the very start of the year. New export orders declined further to 47.8 from 49.0, highlighting renewed pressure on external demand despite exports having played a crucial role in propping up growth through much of 2025. Together, the data signal that both domestic and overseas demand are faltering simultaneously, a combination that leaves manufacturers with few buffers.

Weaknesses extended beyond factories. The non-manufacturing PMI, which captures services and construction activity, slid to 49.4 from 50.2 in December, its lowest level since December 2022. That decline underscores that services consumption, which authorities increasingly view as the next engine of growth, is also losing momentum. Construction activity remains constrained by the prolonged property downturn, while consumer-facing services continue to suffer from cautious household spending.

Huo Lihui, a statistician at the National Bureau of Statistics, noted that some manufacturers typically enter a seasonal lull in January and said market demand remains weak. While seasonality may partly explain the slowdown, economists say the scale and breadth of the contraction point to more persistent issues, particularly the lack of confidence among households and private firms.

China met its official growth target of about 5% last year, an outcome that offered political reassurance but masked growing imbalances. Export strength, helped by competitive pricing and firms rushing shipments ahead of anticipated trade restrictions, offset domestic softness. That strategy now looks increasingly fragile as trade tensions with the United States intensify under President Donald Trump’s renewed tariff push, and as global demand shows signs of cooling.

At home, consumption remains the weakest link. Retail sales growth softened further toward the end of last year, contributing to fourth-quarter GDP growth slowing to its weakest pace in three years. Job insecurity, subdued wage growth, and lingering stress in the property sector have continued to weigh on household confidence. For many consumers, precautionary saving remains a rational response to uncertainty, blunting the impact of policy support.

Beijing has begun deploying targeted fiscal measures in response. Authorities recently front-loaded 62.5 billion yuan ($8.99 billion) from ultra-long special treasury bonds to fund subsidies encouraging consumers to replace goods such as home appliances, vehicles, and smartphones. The programme is designed to stimulate spending without resorting to broad cash transfers, which policymakers remain reluctant to adopt.

Monetary policy has also been nudged toward accommodation. Earlier this month, the central bank cut several sector-specific interest rates and signaled it has scope this year to reduce banks’ reserve requirement ratios and implement broader rate cuts if conditions warrant. These steps are aimed at lowering financing costs, supporting credit growth, and easing pressure on indebted firms, though officials remain wary of reigniting financial risks.

As authorities struggle to lift spending on manufactured goods, attention is increasingly shifting toward service consumption. Policymakers hope sectors such as tourism, healthcare, education, culture, and elderly care can absorb excess industrial capacity and provide new sources of employment. The January PMI data, however, suggest that this transition is proving difficult, with services activity also slipping into contraction territory.

Analysts remain cautious about the outlook. Ting Lu, chief China economist at Nomura, said Beijing will need to do significantly more in the coming months to secure growth above 4.5% in 2026. He warned that as policymakers exhaust easily implemented tools, more comprehensive measures will take time to prepare, raising the risk of a prolonged period of subpar growth.

Strategically, Beijing has made boosting domestic demand its top economic priority this year, alongside accelerating efforts to achieve technological self-reliance. President Xi Jinping has urged officials to push ahead with advanced manufacturing while also making domestic demand the main driver of growth, a balancing act aimed at reducing exposure to external trade pressures and supply-chain disruptions.

Even so, stimulus is likely to remain measured. According to the South China Morning Post, China is expected to set its 2026 growth target between 4.5% and 5%, signaling a cautious approach as policymakers weigh growth support against concerns over asset bubbles and financial stability.

Looking ahead, investors will closely monitor private-sector indicators for confirmation or contrast. Analysts surveyed by Reuters expect the Caixin/RatingDog manufacturing PMI to edge up to 50.3 in January from 50.1 previously, when it is released on February 2. A divergence between official and private surveys could again highlight uneven conditions, with smaller, export-oriented firms potentially faring better than state-linked manufacturers tied more closely to domestic demand.