Okomu Oil Palm Plc first-quarter 2026 results show that the company is tapping Nigeria’s domestic market for growth as export earnings decline amid naira stability.
The palm oil producer reported revenue of N58.95 billion for the three months ended March 31, 2026, representing a 13.8 percent increase from N51.81 billion recorded in the corresponding period of 2025.
Export sales fell by 37.7 percent to N4.16 billion from N7.36 billion a year earlier, making it the weakest component of the company’s revenue mix. In contrast, local sales rose to N54.79 billion from N50.76 billion, accounting for almost 93 percent of total turnover.
The figures indicate that Okomu is becoming increasingly dependent on domestic demand for growth as export markets contribute a smaller share of revenue. The decline in export earnings comes at a time when the benefits many exporters enjoyed from the naira’s sharp depreciation are beginning to moderate.
Despite the strong revenue growth, profit expansion was comparatively slower. Profit before tax rose by 5.9 percent to N34.1 billion from N32.2 billion, while profit after tax increased by 8.6 percent to N23.6 billion from N21.7 billion.
The slower pace of earnings growth compared with revenue suggests that rising costs are beginning to offset part of the gains from higher sales.
One of the major pressures came from finance costs, which surged by more than 70 percent to N1.38 billion from N806.8 million in the corresponding period of 2025. The increase was largely driven by exchange losses and interest expenses.
Exchange losses rose to N1.24 billion from N675.9 million a year earlier, underscoring the continued impact of foreign currency exposures on corporate earnings. Finance income, meanwhile, was negligible at N1.1 million compared with N66.7 million recorded in the same period last year.
The increase in finance costs reduced the benefit of stronger operating performance and contributed to the moderation in profit growth.
However, the company’s core operations remained resilient. Cost of sales declined significantly by 24.4 percent to N11.7 billion from N15.5 billion despite higher revenue. As a result, gross profit increased to N47.4 billion from N36.3 billion.
The improvement suggests stronger pricing, improved product mix, or enhanced operational efficiency within the company’s palm oil and rubber businesses. Gross profit margin improved substantially during the period, demonstrating the company’s ability to convert a larger proportion of revenue into profit before administrative and financing expenses.
Operating expenses rose by 18.2 percent to N11.8 billion from N9.96 billion, reflecting higher administrative and operating costs. Nevertheless, operating profit increased to N35.5 billion from N33 billion, highlighting the strength of the company’s underlying business.
The balance sheet also reflected continued growth in shareholder value. Net assets rose to N72.4 billion from N48.8 billion in the corresponding period of 2025, representing an increase of more than 48 percent.
Revenue reserves expanded to N72.6 billion from N48.95 billion, supported by profit retention and the company’s ability to generate strong earnings over the past year. The increase in reserves strengthens Okomu’s capacity to fund expansion and absorb future shocks without relying heavily on external financing.
The company’s asset base also continued to grow. Biological assets, which comprise fresh fruit bunches and rubber inventories, stood at N5.28 billion during the period, reflecting the scale of its plantation operations.
While profitability remained strong, cash generation showed signs of moderation. Net cash generated from operating activities declined to N21.5 billion from N37.7 billion in the corresponding period last year. This represents a decline of more than 40 percent and suggests that more cash is being tied up in working capital requirements and operational activities.
Consequently, cash and bank balances fell to N31.8 billion at the end of March 2026 from N52.2 billion a year earlier. Although the company remains highly liquid, the reduction highlights a slower pace of cash accumulation compared with the previous year.
Okomu began the year with a share price of N1,095, and is currently trading at N1,575 as of the close of trading on Monday, June 11, gaining 43.8 percent, year-to-date.
The company is currently the 22nd most valuable stock on the NGX with a market capitalisation of N1.5 trillion, which is about 0.957 percent of the Nigerian Stock Exchange equity market.