Leading palm oil-producing and agro-business firm, Okomu Oil Plc has recorded a 57% plunge in its Profit After Tax (PAT) for first half of this year.
The profit dropped by N3.414 billion from N5.943 billion recorded at the end of June 2018 to N2.470 billion declared in the same period this year. Okomu Oil disclosed this in a report sent to the Nigerian Stock Exchange (NSE).
The document titled: Management Reports on Okomu Oil Plc dated June 30, was published on the NSE website on Monday.
[READ MORE: Okomu Oil Palm is a SELL]
The company’s turn-over also dipped from N12.939 billion recorded in 2018 to N8.565 billion this year, signalling a steep decrease of 33.80%.
The Profit Before Tax (PBT) similarly responded to the negative trend, falling by 59% to N2.835 billion from the N6.945 billion garnered last year.
The company’s unimpressive performance in the period may be due to its huge investment in a new palm oil processing mill, whose construction is ongoing. The project which has been described as the largest in Africa is expected to be completed in 2020.
Okomu Oil Plc’s Earnings Per Share (EPS) equally plummeted during the period in question, dipping significantly by 57.46% from N6.23 in Half Year 2018 to N2.65.
Why this matters: This development no doubt has impacted Okomu Oil dividend-paying ability, at least, in the short term. Shareholders may experience a decrease in dividend payout when the 2019 financial year ends.
Consequently, the board and the management of the firm must come up with effective measures to cushion the effects of revenue depletion to sustain shareholders’ confidence.
On Earnings Per Share: Earnings Per Share is the profit that each unit of a company’s ordinary shares recorded during a particular period. It is simply calculated by dividing the Profit After Tax by the company’s total outstanding shares.
[READ FURTHER: Okomu Oil’s faltering revenue growth dampens performance]