Okomu Oil Palm half-year profit up 138%

Okomu Oil Palm, a leading player in the palm oil industry, has reported a significant increase in its half-year profits, with post-tax profits soaring by 138%. The company's half-year revenue also saw a substantial rise of 74.6%. The impressive performance has been attributed to a surge in commodity prices, particularly in crude palm oil and rubber, which have been on an upward trajectory since the beginning of the year. The CEO of Okomu Oil Palm, Graham Hefer, recently sat down with CNBC Africa to discuss the drivers behind the company's remarkable earnings. He highlighted that the favorable commodity prices, coupled with improved yields from mature oil palm crops, were the key factors contributing to the surge in profits. Despite a slight decline in sales in the second quarter, Hefer reassured investors that it was a normal seasonal fluctuation as the company transitions out of its peak production period. Looking ahead, Okomu Oil Palm aims to enhance its export sales by expanding its rubber production capacity, with plans to increase the rubber factory output through the development of additional hectares of rubber plantations. Hefer also emphasized the company's focus on increasing crude palm oil production, with ongoing investments in processing capacity to boost output. While some industry peers have invested heavily in refining operations, Okomu Oil Palm's strategy centers around expanding its processing capabilities to ramp up production. The company is set to commission new oil mills in the coming months, with a target of achieving an annual output of 80,000 to 95,000 tons of crude palm oil in the next few years. In terms of local demand, Hefer highlighted the robust appetite for Okomu Oil Palm's products in the Nigerian market, noting that current supply levels are unable to meet the demand. Despite challenges posed by the economic downturn and the impact of COVID-19 on disposable incomes, the company remains optimistic about sustaining strong domestic sales. Hefer underscored the importance of supporting local consumers while navigating market dynamics and external factors to ensure continued growth. Addressing the investment landscape in the oil palm sector, Hefer acknowledged the challenges facing potential investors, including infrastructural issues, double taxation, and forex constraints. He expressed the need for a more conducive business environment to attract investments and foster sectoral growth, pointing to government initiatives aimed at improving the investment climate. While acknowledging the hurdles, Hefer remained optimistic about the future prospects of the industry, highlighting the opportunities for expansion and development in the Nigerian oil palm market.