Presco’s N17.0b tax credit lifts profit by 34% in Q4

WorldStage Newsonline– Presco, a Nigeria’s palm oil producer has reported its fourth quarter (Q4) 2017 results with 86% profit before tax (PBT) decline to N3.0 billion, but a 34% profit after tax of N20.0 billion, thanks to a tax credit of N17.0 billion.

It recorded sales growth of 44% to N5.4 billion with a 2,038bp  gross margin expansion to 81.8%.

It also reported a 133% y/y rise in operating expenses (opex), a 29% y/y increase in net finance charges and an -85% y/y reduction in biological asset revaluation gains to N3.1bn..

On a full-year basis, sales advanced by 42% to N22.4bn and despite a 146bp gross margin expansion, PBT declined by 65% to N11.0bn due to increases of 71% and 42% in operating expenses and net finance charges.

An 89% decline in biological assets revaluation gain to N2.8bn also contributed as PAT grew by 17% due to a tax credit of N14.5bn.

The company proposed a dividend of N2.00 per share, implying a yield of 3% and payout ratio of 8%.

Year-to-date, Presco shares have gained 5.1%, slightly underperforming the NSEASI which has gained 7.0%.

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