Nigeria’s two publicly listed palm oil producers—Okomu Oil Palm Plc and Presco Plc—are on track to post a record ₦161 billion profit in 2025, driven by elevated global crude palm oil (CPO) prices and efficient operations, according to a new forecast by Afrinvest West Africa.
The analysis projects their combined profit before tax (PBT) to rise by 38.8%, from ₦166.8 billion in 2024 to ₦231.5 billion in 2025. Profit after tax (PAT) is forecast to grow by 36.8%, reaching ₦161 billion.
Afrinvest attributes this bullish outlook to a projected increase in global CPO prices, from the current $900 per metric tonne to $1,200/MT by the end of 2025. The expected price surge is driven by supply disruptions, heightened biodiesel mandates in Asia, and easing trade tensions between economic giants like the U.S. and China.
“With global supply tightening as Indonesia and Malaysia ramp up domestic biofuel mandates, Nigeria stands to benefit from elevated international prices and widening domestic supply gaps,” Afrinvest noted in its 2025 Oil Palm Sector Update.
In 2024, local CPO prices surged by 56.8% year-on-year to ₦420,906/MT. This spike—combined with exchange rate depreciation and rising input costs—pushed industry revenues up by 90.2%, totalling ₦337.7 billion: ₦207.5 billion from Presco and ₦130.2 billion from Okomu.
Despite inflationary pressures and a weakened naira, both companies managed to improve margins through operational optimisation and capacity expansion. Afrinvest anticipates this momentum will continue into 2025, supported by foreign exchange stability and a gradual decline in energy and finance costs.
The report highlights that while Nigeria is the fifth-largest global producer of palm oil, it contributes just 1.9% of global output. Domestic production has stagnated at 1.5 million MT, while demand rose by 4.6% in 2024 to 2 million MT, creating a significant supply gap.
Industry observers believe Nigeria can reclaim its former dominance in palm oil—once dubbed *”Red Gold”—*by harnessing its 2.5 million hectares of underutilised farmland, scaling up mechanisation, and implementing a national strategy that links oil palm to the biofuel economy.
Despite strong fundamentals, Nigeria’s palm oil sector remains undervalued, trading at a price-to-earnings (P/E) ratio of 9.7x in 2024, rising to 13.5x in Q1 2025—still below the global average of 14.5x.
Afrinvest assigned an “ACCUMULATE” rating to Presco, with a target price of ₦1,462.65, representing a 14.7% upside. Okomu received a “HOLD” rating with a fair value estimate of ₦842.31.
