The export of Crude Palm kernel Oil (CPO) to Europe by Presco Nigeria Plc which was aimed at generating dollar revenue is beginning to pay off. CPO has bolstered top lines as well as increased gains on revaluation of biological assets underpinning profitability rise.
For the first nine months through September 2016, Presco’s net income surged by 98.25 percent to N6.80 billion from N3.43 billion as at September 2015.
Sales were up by 48.23 percent to N11.93 billion as the company continues to add oil palm plantations with a view to consolidating market position.
Presco’s bottom lines got a tremendous boost from a 97.31 percent upsurge in gains from changes in fair value of biological assets to N4.40 billion.
Experts are of the view that the ban on importers from accessing dollars for certain products was a windfall on the country’s largest palm oil producer as it fuelled local demand for domestic goods and help slow competition.
‘‘Presco recently commenced export of crude palm kernel oil. As such, we expect a further boost to topline growth in H2, in addition to market share gains on the back of competition (importers) struggling to obtain fx,’’ said analysts at FBN Quest Limited.
The central bank has ban the importation of 41 items including palm oil and textile from its official window as at seek to curb inflation and protect an external reserves that is hard hit due to a sharp fall in the price of oil.
Presco’s share price rose by 5.09 percent to close at N42.30 as of 1:30 pm, making the market capitalization to move to N40.25 billion.