By Alex C
Okomu Oil Palm Company Plc plans to invest about N8 billion over the next four years for business expansion. This development comes as the company’s shareholders last week voted close to N1 billion in dividends for the 2013 financial year.
The dividend translates to N1 for every 50 kobo share held and comes in a year the company posted ‘not very impressive results’ even though the management said it worked exceptionally to keep consolidated cost of sales well in check.
Gbenga Oyebode, Chairman, Okomu Oil, said the company would plant least 10,000 hectares of oil palm within the next three years.
Making this known at the company’s 34th Annual General Meeting (AGM), Oyebode disclosed that while prospects may not currently seem too optimistic, the company’s board feels there was still underlying potential for the company’s development within Nigeria, promising that opportunities exit to offer better returns for the shareholders in the future.
The Chairman stated that the company has begun the expansion of its current oil mill from 30 tonnnes per hour to 60 tonnes per hour at a cost of about N2.5 billion. This move, Oyebode noted, will effectively make Okomu oil one of the largest mills in Africa.
The company’s consolidated results for 2013 showed that turnover -at N8.86 billion slipped 13 percent from N10.1 billion in 2012. This drop is due to the tough operating environment for agri-processing companies, especially seen in lower than average commodity prices and/or volumes.
Consolidated Profit Before Tax( PBT) went down 19 percent to N2.69 billion. Net profit on continuing operations also dropped 42 percent to N2.09 billion.
For the company’s oil palm business, the financial report showed total revenue for all palm products in 2013 lowering 13 percent to N5.62 billion than the previous year’s records. Gross profit recorded at N3.16 billion in 2013 was 21 percent lower as profit on continuing operations for palm products also dropped by 41 percent to N1.32 billion from N2.26 billion in 2012.
For its rubber business, total rubber revenues also dropped 13 percent to N3.23 billion- but cost of sales went up marginally by 7 percent. Gross profit declined 22 percent to N1.82 billion. Rubber prices have since the highs of 2011 dropped by nearly 50 percent with a drop of 29 percent in 2012. This is also followed by another 17 percent drop in 2013.
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