[upme_private]Okomu Oil released its Half Year 2013 Earnings showing revenues dropped sharply by 21% to N4.8billion when compared to the same period last year.Gross profit dropped by half to N2.4billion during the period compared to N4.8billion in the same period 2012. The company posted a pre-tax profit of N1.3billion 52% short less than the N2.8billion posted at the same period 2012. Earnings per share was N1.5 compared to N3 a year earlier.
- Things seem to be getting worse for the company following the last quarter of 2012. Revenue drop of 21% is a reversal of the 6.5% rise it enjoyed in the same period in 2012.
- Gross Profit margin also tanked dropping to 50% this period compared to 80% same period last year. This was mainly due to the rise in 90% rise in cost of sales relative to the drop in revenues.
- Operating Expenses dropped 46% to just above N1billion during the period. The current result does not give an indication as to why they had this significant drop but I won’t be surprised if it had more to do with accounting classifications. Some cost may have been reclassified to cost of sale in conformity with IFRS provisions.
- However operating expenses as a percentage of Gross Profit remained almost unchanged at 45%
- The company is dealing with a very tough operating environment judging by this result. The drop in revenues and rise in cost of sales may also be due to requirements of IFRS regarding how they record revenues and value inventories.
- Share price at blog post was N46 and 1.7x book value per share. It is on my radar for about N21.
Okomu Oil Plc released its 2013 H1 results in the website of the NSE[/upme_private]