Crude palm oil prices jumped in the third quarter of 2025, tightening global supply and boosting the earnings outlook for Nigerian producers, particularly Presco Plc, according to investment firm CardinalStone.
Benchmark Malaysian CPO averaged $1,009.08 per metric tonne in the quarter, up 7.5 percent from the previous period, supported by higher export duties in Malaysia and Indonesia’s B40 biodiesel mandate, which diverted a large share of output into domestic consumption.
“The price uptrend reflects a combination of tighter supply and strong domestic demand in key producing regions,” CardinalStone analysts said in a note to clients. “We expect Nigerian CPO prices to stay elevated, sustained by limited import inflows and steady industrial demand.”
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Presco, Nigeria’s biggest palm oil producer, is seen as a key beneficiary of the global price rally. The company’s earlier strategy of building inventories during peak seasons “should help cushion yield declines in the lean period,” CardinalStone said.
The firm added that Presco’s premium refined products and the consolidation of Ghana Oil Palm Development Company (GOPDC), completed late last year in a deal worth $124.9 million, “will provide upside for topline and margin performance.”
Presco is on track to have its best year yet as the company has already surpassed its full-year net income in 2024 in the first six months of this year.
Half-year profit at the oil palm company soared to N88.7 billion, far ahead of N77.7 billion recorded in the whole of 2024, while revenue climbed to N198.7 billion in the period ended June 2025.
CardinalStone, a Lagos-based advisory and research firm, projects that profit after tax will rise to N142.67 billion by the end of this year while revenue surges to N389.52 billion.
If this forecast materialises, that would be the best performance of the company in its over three decades of existence.
Nigeria’s cooling inflation, which has eased packaging and refining costs, is also likely to support earnings. Still, “Presco’s heavy debt load means borrowing costs are likely to remain elevated in the current quarter,” the note said.
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For Okomu Oil Palm Plc, CardinalStone expects year-on-year revenue growth in Q3 as higher CPO prices offset weaker production. However, quarter-on-quarter performance may soften due to the industry’s typical lean season.
“Revenue from the rubber segment is expected to improve as H2 is usually a peak period,” the analysts said. “But with rubber accounting for only around 10% of total sales, the contribution to overall earnings will remain modest.”
The Edo-based company grew net profit from N20.19 billion in the six months to June 2024 to N47.5 billion in the same period this year, representing a 135.2 percent growth.
Okomu’s strong cash balance and low debt levels are seen as key supports for profitability. “Its low leverage provides room for better net finance outcomes compared with peers,” CardinalStone noted.
Both companies are expected to benefit from resilient CPO prices into the fourth quarter. Still, CardinalStone said Presco’s integrated operations and scale offer a stronger earnings buffer in the current high-price environment.
“With inflation moderating and palm oil prices staying firm, Presco remains our preferred play in the Nigerian palm oil sector,” the analysts said.