OKOMU OIL PALM PLC: SLOWING DOWN?

It looks like Okomu Oil Palm PLC lost some steam in the second quarter of the current year thus slowing down the pace of the first quarter.
According to figures released to the stock exchange recently, in the three months to June 2015 (that is second quarter) Okomu oil recorded a drop in turnover to N2567.7m as against N3039.6m within the same period in 2014.
However, in spite of this, turnover for the half year which includes first and second quarters, rose marginally by 2.5 per cent to N4991.4m from N4869.5m previously.
The same thing occurred even with cost pressure. It was more intense in the second quarter. Thus the company's cost of sale grew by 56 per cent in the second quarter compared to final 25.3 per cent for the half year.
However, the good news was that Okomu Oil did better with overall cost management in the second quarter. Hence operating expenses dropped by 37.8 per cent in the second quarter even though final drop for the whole half year came to only 20.7 per cent.
Then there was the icing on this cake as finance cost growth slowed down in the second quarter. It went up by 34.2 per cent in this critical quarter and still ended full half 54.6 per cent up. Meaning the growth in the first quarter was almost crippling.
The pay off came with Okomu Oil ending the second quarter to June with 37.1 per cent profit margin (gain on each N100 sale) and 42.8 per cent for the full half year. 
IN CONCLUSION:
*All things being equal, Okomu Oil should end 2015 financial year with higher profit margin  than it recorded in 2014 despite present day challenges.
* It should also be in a position to declare dividend unless macro liquidity squeeze forces the directors to conserve funds.
* However, all these may be easier to achieve if the slow down in turnover growth ins second quarter can be reversed.

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