• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Opinions Blurb

Okomu Oil and its multifarious related party transactions

Blurb Team @Nairametrics by Blurb Team @Nairametrics
July 19, 2020
in Blurb
Okomu Oil and its multifarious related party transactions
Share on FacebookShare on TwitterShare on Linkedin

Okomu Oil is one of Nigeria’s oldest and largest agriculture-based companies. It is majorly owned by SOCFINAF SA, a Belgian company with 62.69% controlling stake in the company’s 953.9 million ordinary shares. No Other shareholder owns more than 5% of the company. SOCFINAF also owns several oil palm plantations across Africa especially in countries like Ivory Coast, Cameroon, Congo, Ghana, Liberia, and Sierra Leone. It also has business interest in Indonesia and in Europe.

The company recently reported a pre-tax profit of N3 billion in the first quarter of 2020 representing an impressive 150% jump from same period 2019. The result is also in line with analysts expectation that Nigeria’s agricultural sector will reap bountifully from the 2020 covi-19 pandemic. Its impressive results have helped catapulted its share price from below N60 to over N70 per share in three months. The relationship between performance and share price is easy to comprehend.

READ MORE: What bad stocks have in common with bitter relationships 

RelatedStories

CBN's Oil Palm Initiative, Delta State

Nigerian Palm Oil about to get expensive, Indonesia increases export levy

May 18, 2025
Okomu Oil Palm

Okomu Oil sees 39.8% profit jump in first quarter 2025, on strong turnover 

May 2, 2025

However, looking beyond the company’s impressive first quarter result, one observes another interest relationship, that between its majority shareholders and Okomu Oil. In accounting, this term is called related party transactions. According to IAS 24, the accounting standard that governs related party transactions, a related party is a person or entity that is related to the entity that is preparing its financial Statements. For Okomu Oil, its related party transactions with its majority shareholder is worthy of mention.

Okomu Oil sells two main products, Crude Oil Palm and Rubber. It exports the latter, while COP is mainly sold locally. To export rubber Okomu Oil relies heavily on its related company, SOGESCOL FR SA . It sells all of its rubber to SOGESCOL FR SA who then goes on to sell to buyers in the world market. Total sales for 2019 alone was N2.9 billion. Okomu Oil claims this transaction is at arms-length.

Okomu Oil also reports that SOCFINCO FR another related party “has exclusive rights to know-how and manages the affairs of the company”. It also reveals that in exchange for obtaining this know-how from SOCFINCO FR, Okomu Oil pays technical fees “at an aggregate rate equal to 3% of the company’s net sales and management fees are 3% of profit before tax”. These fees cost the company about N882 million and N933 million in 2019 and 2018 respectively. The figures are net of taxes. These are all contained in page 65 of its 2019 annual reports. We are not done.

READ: Banking related phishing up 9% in 2019, e-stores down 10%

SODIMEX FR another related party of Okomu Oil also sells “a large amount of its equipment and spare parts” to Okomu Oil in a transaction value worth about N380 million in 2019 (N688 million in 2018). It also claims these transactions were all at arms-length. Another interesting related party transactions is the sale of palm seeds from SOCFINDO SA, yet another related company. In 2018 Okomu Oil boughtN20.3 million of palm seeds but zero in 2019. It also purchases mucuna seeds from another related company, SOCFIN Agricultural Company, though zero sales were recorded in the last two years.

Two Nigerian owned related companies, INDUSERVICES FR and Perfect securities sell internet services and building construction services respectively to Okomu Oil. On its website, PERFECT SECURITY SERVICES LIMITED says it provides a wide range of security and other security related services, consultancy, risk management, training services to organizations, institutions and private individual and those in the public sector. In 2019, Perfect Securities carried out “building construction services” for Okomu Oil worth about N13.9 million.

READ MORE: Okomu Oil Palm Company Plc. announces AGM and dividend payment of N2.00 per share 

It is important to note that the entirety of these transactions are legal and permissible provided it is all at arms length as the company confirms they are. However, the breadth of the related party transactions if for nothing reveals just how much control SOCFINAF, its Luxembourg based majority ultimate shareholder has over the entity.

Should shareholders be worried? Well, considering that the company pays dividend every year and has a knack for issuing bonus shares once every decade, there is little to be worried about from a shareholder’s perspective. Suffice to add that its share price has risen more than 170% in the last 5 years and seem poised to deliver on capital gains.

Thus, for now, we can only watch in awe as the company continues to foster its relationship with its majority shareholders and hope that all that starts well ends well.


Okomu Oil is included in Nairametrics Stock Select Portfolio. Subscribe to our Stock Select Newsletter to see all the stocks recommended for our Portfolio. 


Follow us for Breaking News and Market Intelligence.
Tags: Company Financial ResultsCOMPANY RESULTSFeaturedOkomu Oil Palm Company PlcRelated Party
Blurb Team @Nairametrics

Blurb Team @Nairametrics

The "Blurb Team" is the official conveyer of the opinions of the Nairametrics Research & Analysis Board on matters of financial reports, macroeconomic data, and economic policies.

Related Posts

CBN's Oil Palm Initiative, Delta State
Commodities

Nigerian Palm Oil about to get expensive, Indonesia increases export levy

May 18, 2025
Okomu Oil Palm
Company Results

Okomu Oil sees 39.8% profit jump in first quarter 2025, on strong turnover 

May 2, 2025
Okomu Oil Palm
Company News

Okomu Oil, Presco post 94% growth in profits in Q1’2024 amid rising inflation

June 20, 2024
Presco Plc Oil Production
Dividends

Presco, Okomu shine amid unmet product demand

November 20, 2023
Meet Dahiru Mangal, a Nigerian billionaire businessman who started out as a truck driver
Profiles

Meet Dahiru Mangal, a Nigerian billionaire businessman who started out as a truck driver

June 3, 2023
How Deola Sagoe left her father's company, Elizade Motors, to build a global fashion brand
Profiles

How Deola Sagoe left her father’s company, Elizade Motors, to build a global fashion brand

May 20, 2023
Next Post
FirstBank

First Bank rewards its Verve card holders with free fuel

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
nlng
first bank
Zenth Bank








DUNS

Recent News

  • Wedex 2025—One day, one house, one goal
  • Onga ignites African culture and storytelling at AMVCA 2025 Culture Day with festival of flavours 
  • Anambra Govt acquires land in Aguata, Orumba for new industrial city 

Follow us on social media:

Recent News

Wedex 2025—One day, one house, one goal

Wedex 2025—One day, one house, one goal

June 12, 2025
Onga ignites African culture and storytelling at AMVCA 2025 Culture Day with festival of flavours 

Onga ignites African culture and storytelling at AMVCA 2025 Culture Day with festival of flavours 

June 12, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics