The revenue of Benso Oil Palm Plantation (BOPP) rose by 14.1%y/y to GHS89.67 million for the first nine months of 2020 (9M-2020), driven by 37.%y/y rise in the price of Crude Palm Oil to USD798.12 per MT in September 2020. The price Palm Kernel Oil also increased by 25.1%y/y to USD767.14 per MT in September, according to data from the World Bank.

The company’s margins were also buoyed by a slowdown in the growth of operating expenses, which rose by 7.5%y/y (versus 34.2%y/y in 9M-2019) to GHS10.44 million in 9M-2020. This helped to reduce the operating expense ratio by 80bps to 11.6% in 9M-2020 from 12.4% in 9M-2019.

BOPP’s profit before tax surged by 85.4%y/y to GHS16.49 million in 9M-2020 from GHS8.89 million in 9M-2019. Net earnings also jumped by 79.8%y/y to GHS13.67 million from GHS7.61 million over the same period. Consequently, the company’s net profit margin went up from 9.7% to 15.2%.  

There is a positive short-term outlook for palm oil prices on back of anticipated disruptions to output by the La Nina weather pattern, which cause flooding in the key producing countries of Malaysia and Indonesia. In addition, palm oil is becoming attractive to sensitive buyers who are concerned by the rising price of sunflower oil.