Take a look at PRESCO’s 9 month unaudited accounts

Presco Plc (“PRESCO” or “the Company”) has released its 9 month unaudited accounts (unaudited financial statements) for the nine-month period ended September 2025 (9M 2025), revealing a strong year-on-year performance. However, its third-quarter (Q3 2025) results showed a moderation, as higher palm oil prices were not sufficient to fully offset weaker production volumes.

According to World Bank data, global palm oil prices strengthened in the third quarter, reaching US$1,038 per metric ton (mt) in September 2025. The average price for the year is projected at US$1,020/mt, notably higher than the US$963/mt recorded in 2024.

Overall, the nine-month report reflected robust top- and bottom-line growth. Revenue rose 113.51% year-on-year (y/y), while net profit increased by 114.02% y/y, alongside a wider margin—particularly an EBITDA margin expansion of 314 basis points (bps) y/y.

Nevertheless, this strong cumulative performance masked a softer Q3. Quarter-on-quarter (q/q), sales declined by 27.8%, while cost of sales surged by 163.0%, resulting in compressed quarterly profitability. This seasonal dip aligns with historical industry patterns, as similar trends were observed among key sector peers during the same period.

During the year, the Company declared a second interim dividend of ₦10 per share, underscoring the strength of its balance sheet and shareholder value creation. Shareholders’ equity expanded significantly, rising ₦145.25 billion y/y to ₦229.88 billion.

9M 2025 Performance (Year-on-Year Analysis)

Presco Plc recorded a remarkable revenue increase from ₦128.57 billion to ₦274.50 billion, representing strong growth in the first nine months of 2025. This performance was primarily driven by a 53.28% y/y increase in domestic sales and the full consolidation of the Ghana Oil Palm Development Company (GOPDC).

However, local sales growth trailed that of its main competitor, which achieved a 75.99% y/y increase. The acquisition of GOPDC significantly enhanced Presco’s revenue mix, with Ghana now contributing 25.33% to group sales. Additionally, new export channels to Germany and Austria accounted for 2.88% of total revenue, further diversifying the Company’s geographic footprint.

Profitability metrics also showed improvement when compared with its primary industry peer. The gross profit margin climbed to 73.62% (from 71.94% in 9M 2024), while the EBITDA margin improved to 61.53%, up from 58.40% in the same period of 2024.

As a result, net profit rose to ₦110.79 billion, reflecting 114.02% y/y growth—slightly higher than its competitor’s 112.90% y/y increase. The net profit margin edged up to 40.36%, compared with 40.26% in the prior year, highlighting sustained profitability despite operational headwinds.

9M 2025 Performance (Year-on-Year Analysis)

The Company’s expansion during the nine-month period was supported by increased leverage. Total debt rose by ₦97.23 billion year-on-year (y/y), resulting in a 255.33% y/y increase in finance costs. This impact was mitigated by a corresponding rise in shareholders’ equity to ₦229.88 billion, driven by strengthened retained earnings following the full acquisition of GOPDC.

Despite the higher borrowing, the Debt-to-Equity ratio remained relatively stable at 0.68x, only marginally below the 0.69x recorded in the prior year.

Q3 2025 Performance (Quarter-on-Quarter Analysis)

Presco Plc’s third-quarter (Q3 2025) results reflected the expected seasonal slowdown in operations. Revenue declined by 27.81% quarter-on-quarter (q/q) to ₦75.76 billion—a smaller drop compared to its main competitor’s 38.49% decline in sales.

The contraction in Presco’s revenue was largely driven by weaker sales in Nigeria (-29.65% q/q) and Ghana (-47.77% q/q). However, these declines were partially cushioned by contributions from new export markets, specifically Germany (₦7.48 billion) and Austria (₦431 million).

Top-line pressure, coupled with a 163.00% q/q rise in cost of sales, significantly compressed quarterly profitability. The EBITDA margin declined from 61.47% to 42.62%, slightly below the 46.48% recorded by its core competitor during the same period. Similarly, the Net Profit margin moderated to 28.95%, compared to 39.20% in the preceding quarter, aligning closely with the 29.00% reported by its industry peer.

Strategic Initiatives & Outlook

Earlier in 2025, the Company successfully acquired a 100% equity stake in the Ghana Oil Palm Development Company (GOPDC) for US$124.93 million, marking a major milestone in its regional expansion strategy. Building on this momentum, Presco announced plans in Q3 2025 to acquire Saro Oil Palm Limited (SOP) for US$46.71 million. The SOP acquisition includes a 22,500-hectare landholding, with a target of 8,000 hectares to be cultivated by year-end 2025.

To support these strategic investments, Presco also unveiled a ₦250 billion rights issue, with a qualification date of 13 October 2025. The proceeds are intended for debt refinancing, settlement of outstanding acquisition obligations related to GOPDC and SOP, and general business expansion.

Reflecting the strong 114.02% growth in earnings per share (EPS), the Board declared a second interim dividend of ₦10 per share, bringing the total interim dividend for FY 2025 to ₦30 per share.

Year-to-date, Presco’s share price has appreciated by 211.56%, underscoring strong investor confidence in its performance and growth strategy. The execution of these strategic initiatives and the planned capital raise are expected to remain key focus points for the market as the Company advances toward its full-year results.

With continued operational discipline and expansion momentum, Presco Plc appears well positioned to achieve the year-end target price of ₦1,749.15, representing an 18.19% potential upside from current levels.