Okomu Oil Palm Company Plc reported a 12% decline in pre-tax profit for the first half of 2026, amounting to N59 billion compared to N66.8 billion in the same period last year. The company attributed the drop to rising input costs and a slight decrease in production volumes.
H1 2026 Financial Highlights
Revenue for the period grew marginally by 4% to N120 billion from N115.4 billion in H1 2025, but cost of sales surged 18% to N72.4 billion, squeezing margins. Operating profit fell 10% to N68 billion, while net profit after tax stood at N41.3 billion, down 14% year-on-year.
Revenue and Cost Analysis
The revenue increase was driven by higher palm oil prices in the first quarter, but volume declines in the second quarter due to seasonal weather impacts limited overall gains. Production of crude palm oil dropped 5% to 98,000 tonnes, the company disclosed. Meanwhile, fertilizer and labor costs rose sharply, contributing to the higher cost of sales.
Production and Market Conditions
Okomu noted that the industry faced headwinds from persistent inflation and supply chain disruptions, which increased the cost of farm inputs and logistics. The company's management emphasized ongoing efficiency measures to mitigate these pressures. According to the financial statement, the second half outlook remains cautious due to continued economic uncertainty.
Outlook for Second Half
The company expects production to improve in the third quarter as weather conditions normalize, but volatile input costs may persist. Analysts suggest that Okomu's strong market position in the oil palm sector provides a buffer against these challenges. The board declared an interim dividend of N2.50 per share, unchanged from last year, signaling confidence in cash flow stability.
