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Okomu Oil posts decline in half-year profit
Okomu Oil recorded a 22 per cent decline in half year profit after tax to 2.47 billion naira, despite the 26 per cent reduction in operating expense. Graham Hefer, Managing Director of Okomu Oil Palm joins CNBC Africa to give us the facts behind the number.
Mon, 30 Jul 2018 14:04:01 GMT
Disclaimer: The following content is generated automatically by a GPT AI and may not be accurate. To verify the details, please watch the video
AI Generated Summary
- The decline in profit is attributed to softening market conditions, excess stock, and price pressures following the peak season for palm oil.
- Trade tensions between major economies like China and the US have impacted commodity prices, leading to a 9% decrease in year-on-year rubber sales for Okomu Oil Palm.
- The company remains focused on cost management strategies to counteract market fluctuations and maintain resilience in the face of uncertainty, while cautiously optimistic about a potential market recovery in the later part of the year.
Nigeria's Okomu Oil Palm Company PLC has reported a 22% decline in half-year profit after tax, amounting to 2.47 billion naira. This drop comes despite a notable 26% reduction in operating expenses. Graham Hefer, the Managing Director of Okomu Oil Palm, joined CNBC Africa to shed light on the factors influencing this decline in profitability. Hefer attributed the decrease in profit to a combination of market forces, seasonal trends, and international trade dynamics affecting the palm oil and rubber industries. The company faced challenges as the price of palm oil did not increase following the peak season, leading to excess stock and softening market conditions. Additionally, trade tensions between major players like China and the US impacted commodity prices, including rubber, contributing to a 9% decrease in year-on-year rubber sales. Hefer emphasized the company's focus on cost management to mitigate adverse effects on profitability. While Okomu Oil Palm remains optimistic about a potential market recovery in the third and fourth quarters of the year, Hefer acknowledged the uncertainty and cautioned investors to be prepared for fluctuations in performance. Despite external factors beyond their control, Okomu Oil Palm is committed to navigating the challenges and maintaining resilience in the face of market volatility. The company's strategic approach to cost efficiency and market responsiveness will be crucial in managing future uncertainties and sustaining long-term growth.
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