Presco profits was down 64% in 2013 due to revenue drops, write offs and interest cost. In fact IFRS was basically to blame. Here is what the Chairman had to say from an article I culled this up from The Nation
“Mr. Pierre Vandebeeck, blamed the decline on the provisions of the International Financial Reporting Standard (IFRS) and slowdown in the operating environment.According to him, the company used the IFRS in the 2013 audited report, which required revaluation of biological assets on the basis of international price of assets as at the year-end. While there were no decline in the price of oils in Nigeria by the year-end, there was a decrease in the world market price of biological assets and oils, which led to a revaluation loss of about N1 billion.
We had a robust 2012 with high commodity prices, coupled with good production and marketing. Management worked hard enough and achieved good result. We knew by the end of 2012 that it will be difficult to repeat the performance in terms of absolute figures and hence concentrated on achieving improved efficiencies, further value addition and consolidation of gains made in the past years,” Vandebeeck said.
He noted that in spite of the obvious decline in performance, the company actually performed very well in 2013 as it achieved impressive records in production, new acquisitions, manufacturing facilities, planted areas as well as business efficiency.
“We are in the plantation business and our profits come from the trees we plant. That remains the focus. As long as we take care of our plantation, ensure that we continually add to the planted area, control leakages and improve efficiencies, we have no fear. Nigeria presents a unique market wherein the buying power of its population is increasing, food grade oil is in short supply, abundant labour and land and good weather,” Vandebeeck said.
He said the outlook for the company in 2014 appears brighter citing the first quarter performance.
Presco primarily engages in the development of oil palm plantations, palm oil milling, palm kernel processing and vegetable oil refining. The main products of the company included refined bleached and deodorized palm oil, palm olein, palm stearin, palm fatty acid distillate, palm kernel oil (crude and refined) and palm kernel cake.
Sounds like a lot of optimism here. You might want to read up the article here