Nigeria’s main palm oil producers are poised to publish document earnings of N161 billion in 2025, pushed by surging crude palm oil (CPO) costs and powerful operational fundamentals, in response to a brand new report by Afrinvest West Africa.
The report tasks that the mixed revenue earlier than tax (PBT) of Okomu Oil Palm Plc and Presco Plc, Nigeria’s two listed palm oil giants, will rise 38.8 % year-on-year from N166.8 billion in 2024 to N231.5 billion in 2025, whereas revenue after tax (PAT) is estimated to leap 36.8 % to N161 billion.
This bullish forecast is underpinned by expectations that world CPO costs will climb to $1,200 per metric tonne (MT) by the tip of 2025, up from the present $900/MT. The value rally is being pushed by provide disruptions, intensified biodiesel demand in Southeast Asia, and easing commerce tensions between main economies just like the U.S. and China.
“With world provide tightening as Indonesia and Malaysia ramp up home biofuel mandates, Nigeria stands to profit from elevated worldwide costs and widening home provide gaps,” Afrinvest mentioned in its 2025 Oil Palm Sector Replace.
In 2024, native palm oil costs surged 56.8 % year-on-year to N420,906 per MT, reflecting the ripple impact of world value actions, naira devaluation, and imported enter inflation. These tailwinds helped enhance business income by a staggering 90.2 % to a document N337.7 billion—N207.5 billion from Presco and N130.2 billion from Okomu.
Regardless of inflationary pressures and rising prices of manufacturing, aggravated by a 46.2 % naira depreciation and elevated vitality prices, revenue margins widened. Presco and Okomu’s resilience stemmed from greater manufacturing volumes, capability optimisation, and improved operational effectivity.
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Afrinvest expects profitability to stay sturdy in 2025, supported by stabilising international alternate situations, softening vitality prices, and easing finance prices. With CPO costs on the rise and Nigeria nonetheless grappling with a home provide shortfall of 450,000 MT, the oil palm sector is rising as one of many nation’s most promising non-oil development frontiers.
Whereas Nigeria is the fifth-largest oil palm producer globally, contributing simply 1.9 % of world output, it continues to path consumption considerably. Native manufacturing was flat at 1.5 million MT in 2024, whereas demand grew 4.6 % to 2 million MT.
Trade gamers and analysts imagine that with over 2.5 million hectares of underutilised arable land and growing investor curiosity, Nigeria has an opportunity to reclaim its former “Pink Gold” glory if backed by sturdy coverage reforms, funding in mechanisation, and a nationwide technique linking manufacturing to the biofuels worth chain.
At present market valuations, Nigeria’s palm oil sector stays deeply discounted relative to world friends. The sector’s price-to-earnings (P/E) ratio stood at 9.7x in 2024, rising to 13.5x in Q1 2025, in comparison with 14.5x globally. This undervaluation, Afrinvest famous, presents a compelling upside for long-term buyers.
Presco shares have been rated “ACCUMULATE” with a goal value of N1,462.65, indicating a 14.7 % upside. Okomu was rated “HOLD” with a good worth of N842.31.
As world edible oil markets proceed to regulate to local weather shocks, geopolitical dangers, and vitality transitions, Nigeria’s oil palm sector could possibly be coming into a golden period—if it performs its playing cards proper.
