Presco Plc has recorded an exceptional financial performance for the 2024 fiscal year, reporting a staggering N128 billion pre-tax profit, marking a 156.05% increase from the N50 billion recorded in 2023.
The palm oil producer’s latest financial results, released on January 31, 2025, show robust growth across key metrics, with revenue, profits, and asset valuation all reaching new highs.
The company’s fourth-quarter results were particularly strong, with pre-tax profit surging by 233.46% to N60.9 billion, a remarkable increase from the N18.2 billion reported during the same period last year. Fourth-quarter revenue also experienced a sharp rise, reaching N69.5 billion, which represents a 172.34% increase from N25.5 billion recorded in the fourth quarter of 2023.
For the full year 2024, Presco’s total revenue hit N198.1 billion, nearly doubling the N102.4 billion it recorded in 2023, reflecting a 93.48% year-on-year increase. The bulk of this revenue came from Nigeria, which accounted for 90.2% of total sales, amounting to N179.1 billion, while Ghana contributed N18.9 billion.
The company’s crude and refined palm oil products remained the primary driver of revenue, bringing in N198.14 billion, which represented 99.92% of total earnings. Meanwhile, the sale of mill by-products contributed only a modest N15.7 million to overall revenue.
However, operational costs also rose significantly. The cost of sales climbed by 68.66%, increasing from N37.3 billion in 2023 to N63 billion in 2024. The largest portion of this increase came from mill processing, refinery operations, and packaging costs, which collectively accounted for 47.8% of total production expenses.
Additionally, maintenance of mature plantings, harvesting, and laboratory expenses contributed 26.3%, while employee wages and benefits made up 14.95%. Other miscellaneous costs accounted for the remaining portion.
Presco’s gross profit more than doubled, soaring by 107.74% to N135 billion, up from N65 billion in the previous year. The company’s administrative expenses also increased, growing by 39.91% to N33 billion, largely driven by higher staff costs, management fees, and transportation expenses.
Meanwhile, selling and distribution expenses rose sharply by 81.12% to N2.8 billion, with most of this increase attributed to road transportation costs for finished products, which amounted to N2.6 billion of the total.
One of the key factors that contributed to Presco’s stellar profit growth was its foreign exchange gains and asset revaluation adjustments. The company reported an exchange rate gain of N6.1 billion, reflecting a 40.39% increase from the N4.3 billion recorded in 2023. Additionally, the revaluation of its biological assets, which includes the valuation of its palm plantations, saw a dramatic increase.
The gain from biological asset revaluation soared by 102.86%, reaching N24.8 billion, compared to N12.2 billion recorded in the previous year.
However, Presco’s finance costs continued to rise, reaching N12.7 billion, a 38.89% increase from the N9.2 billion recorded in 2023. A significant portion of this increase came from interest expenses on loans, which amounted to N12 billion. Nevertheless, the company experienced a major boost in finance income, which skyrocketed by 5,467.18% to N2.6 billion, a dramatic surge from the N48.1 million recorded the previous year.
As a result of these combined factors, Presco’s pre-tax profit for 2024 reached N128 billion, a significant improvement from N50 billion reported in 2023, cementing its position as one of Nigeria’s most profitable palm oil producers.
Presco’s asset base also witnessed substantial expansion during the year. The company’s total assets surged to N422 billion, a dramatic increase compared to N170.3 billion in 2023. This growth was driven by increases in both non-current and current assets. Non-current assets reached N233.5 billion, with property, plant, and equipment making up 67.5% of this total, while intangible assets contributed 28.4%. Current assets also more than doubled, reaching N188.4 billion, compared to N68.5 billion in the prior year. This increase was primarily driven by the growth in biological assets and trade receivables.
The company’s continued investment in plantation expansion, refining capabilities, and operational efficiency has enabled it to capitalize on the growing demand for palm oil products. However, rising production costs, foreign exchange fluctuations, and economic uncertainties remain potential challenges that could impact future growth.
Nigeria’s leadership in palm oil production has decreased over time, from 43% of the world’s production in the 1960s to less than 2% today.
Annual demand for palm oil in Nigeria currently stands at around 3 million metric tons, while annual production remains low at around 1.4 million metric tons. This is because Nigeria currently spends about 500 billion annually on imports to fill the deficit in production.
However, there has been an uptick, thanks to companies like Presco. In 2023, the production of palm oil in Nigeria reached 1.4 million metric tons. Between 2009 and 2023, the production quantity generally increased, registering the highest growth in 2010, when it grew by roughly 14 percent. From 2014 onwards, the output from palm oil production has been on the rise.
