Okomu Oil Palm Company Plc has announced a substantial final dividend of N26.00 per ordinary share of N50 kobo, rewarding its shareholders for their continued support during a year of exceptional financial performance. This announcement, released via a disclosure on the Nigerian Exchange on April 3, 2025, and signed by Company Secretary Chukwuebuka Omerole, highlights the company's strong financial health and commitment to shareholder value.
Dividend Details and Shareholder Information
The final dividend, pertaining to the fiscal year ending December 31, 2024, is subject to withholding tax and regulatory approval. Shareholders listed on the Register of Members as of the close of business on April 24, 2025, will be eligible for the payout, scheduled for May 22, 2025. The company has emphasized the importance of completing e-dividend registration, as payments will be made exclusively via electronic transfer to shareholders' bank accounts.
Okomu Oil's final dividend translates to a total payout of N24.8 billion. Based on the current share price of N545.2, the dividend yield stands at an attractive 4.77%. Furthermore, the dividend payment ratio of 62.79% reflects the company's commitment to distributing a significant portion of its earnings to shareholders.
Notably, Okomu Oil's price-to-earnings (P/E) ratio of 14.92x is significantly lower than the industry average of 36.92x, suggesting that the company's stock is currently undervalued. This indicates a potential opportunity for investors seeking strong returns.
Exceptional Financial Performance Drives Dividend Payout
Okomu Oil's robust dividend declaration is underpinned by its outstanding financial performance in 2024. The company reported a pre-tax profit of N53.5 billion, representing a remarkable 58.27% increase compared to the N33.8 billion recorded in the previous year.
The company's balance sheet also reflects substantial growth, with retained earnings rising to N53.9 billion from N36.8 billion in 2023. Revenue soared by 73.36% year-over-year, reaching a total of N130.2 billion. Palm oil production remained the primary revenue driver, contributing N107.5 billion, followed by rubber sales at N22.5 billion and palm oil processing at N149.6 million.
Key Factors Driving Growth
Chairman Mr. Gbenga Oyebode attributed the company's exceptional performance to the sustained rise in the prices of its key products. "This exceptional performance was driven mainly by the sustained rise in the prices of our key products, with crude palm oil prices increasing approximately 35% year-on-year, alongside a remarkable 194% rise in rubber prices," he stated.
He also acknowledged the company's commitment to rewarding its shareholders. "In recognition of our company’s strong performance, the Board of Directors declared an interim dividend of N10.00 for the fiscal year 2024 to reward our loyal shareholders for their continued trust. Additionally, the Board has recommended a final dividend payment of N26 per share, bringing the total dividend payout for 2024 to N36 per share," Oyebode added.
Implications for Investors and the Market
Okomu Oil's strong financial results and generous dividend payout are likely to attract significant investor interest. The company's undervalued status, as indicated by its low P/E ratio, presents a compelling opportunity for investors seeking growth and income.
The company's performance also reflects the resilience of the Nigerian agricultural sector, particularly the palm oil and rubber industries. The sustained rise in commodity prices has significantly boosted Okomu Oil's revenue and profitability, contributing to its strong financial position.
Okomu Oil’s dedication to electronic dividend payments also speaks to a move to modernize and streamline the process. This helps in efficiency and reduces the amount of unclaimed dividends.