A powerful rally in global crude palm oil (CPO) prices has reshaped the earnings landscape for Nigeria’s two largest listed palm oil producers, Presco Plc and Okomu Oil Plc, pushing both companies to their strongest financial performance on record in 2025. Rising prices, resilient domestic demand, and steady production volumes combined to deliver exceptional revenue and profit growth, even as higher costs and balance-sheet expansion introduced new pressures beneath the surface.
CPO prices climbed to an average of $1,007 per metric tonne in 2025, up from $923 the previous year, creating a favourable pricing backdrop for producers. Against this backdrop, Presco and Okomu recorded a combined net profit of N201.64 billion, almost double the prior year’s result, while total revenue surged 125 percent to N538.69 billion. The figures underline how effectively both companies capitalised on the global palm oil upswing.
Yet, the earnings boom masked diverging financial dynamics. Presco, Nigeria’s largest listed palm oil producer by scale, leaned aggressively into expansion. The company’s finance costs ballooned by 240.99 percent, driven by higher interest expenses on loans and overdrafts, as total debt rose 180.49 percent to fund growth initiatives. A key driver was the acquisition of the Ghana Oil Palm Development Company (GOPDC), a strategic move aimed at boosting long-term production capacity and regional footprint. Offsetting some of the pressure, Presco’s finance income jumped more than thirty-fold to N7.8 billion, largely reflecting higher interest earnings.
Okomu, by contrast, faced a different financial mix. Finance income declined by 20.37 percent to N11.07 billion, mainly due to a drop in foreign exchange gains following a more stable naira in 2025. Finance costs increased by 31.80 percent to N13.78 billion, driven by exchange losses linked to the revaluation of foreign-currency liabilities. Still, these pressures did little to derail profitability, as operating performance remained robust.
Market analysts remain broadly optimistic about both companies’ outlook. Analysts at Meristem expect Presco and Okomu to sustain strong performance into 2026, even as global CPO prices show signs of moderation. Higher harvest volumes, improved operational efficiency, and steady demand are expected to support Okomu, while Presco’s larger scale and the continued contribution from the GOPDC acquisition should help cushion price pressures and preserve margins.
Presco’s full-year results highlight the scale of its advance. Profit attributable to shareholders rose to N138.1 billion in 2025 from N76.1 billion a year earlier, while revenue increased 60 percent to N331.2 billion. Strong sales of crude and refined palm oil across Nigeria and Ghana underpinned the performance, allowing the company to shrug off a softer fourth quarter and still deliver record earnings.
Okomu also posted an impressive showing. Profit after tax climbed to N63.53 billion, compared with N39.95 billion two years earlier, as gross profit jumped 71 percent to N139.55 billion. Higher palm oil prices and improved margins translated efficiently into earnings, reinforcing Okomu’s reputation for operational discipline.
A closer comparison, however, reveals a clear contrast in efficiency. While Presco generated higher absolute revenue, Okomu outperformed on profitability, posting a margin of nearly 49 percent versus Presco’s 42 percent. This gap reflects sharper cost control and more efficient use of assets at Okomu.
Efficiency ratios deepen the contrast. Okomu’s return on equity surged to 113.34 percent from 71.19 percent in 2024, while return on assets rose 46.71 percent, signalling a business extracting more value from both capital and plantations. Presco’s ROE slipped to 43.41 percent from 54.57 percent, and ROA fell to 21.11 percent, largely due to a substantial increase in equity and assets following capital raising and expansion. The investments have diluted short-term efficiency ratios but position the company for longer-term growth.
Cash flow metrics tell a similar story. Okomu converted a larger share of revenue into cash, generating N81.18 billion in net cash flow on N130.81 billion of revenue, a free cash flow margin of about 62 percent. Presco produced more cash in absolute terms—N146.17 billion—but on much higher revenue, translating to a margin of roughly 44 percent. The figures suggest Okomu enjoys superior cash discipline, while Presco benefits from sheer scale.
On the equities market, both stocks remain investor favourites, though momentum has cooled after extraordinary gains in 2025. Okomu, with a market capitalisation of N1.15 trillion, is up 10.2 percent year to date after a 147 percent rally last year. Presco, valued at N1.97 trillion, has risen 16.6 percent so far in 2026, following an even stronger 189 percent surge in 2025.
Taken together, the results highlight a familiar trade-off in Nigeria’s palm oil sector. Presco’s size and expansion strategy deliver revenue leadership and long-term growth potential, while Okomu’s leaner operations continue to produce superior efficiency and cash conversion. As palm oil prices normalise, the balance between scale and discipline is likely to define which advantage proves more durable.