Benso Oil Palm Plantation's (BOPP:GSE) revenue rose by 20.1%y/y to GHS55.14 million in the first half of 2019 despite 16.8%y/y drop in the average Crude Palm Oil (CPO) price during the period. We believe that revenue was driven by improved CPO output arising from better weather conditions that boosted productivity. In addition, BOPP earns its revenue in USD, and as such the weakening of the GHS against the USD by 9.1% in 1H2019 helped to cushion revenue against lower CPO prices. BOPP benefits from a weaker GHS as palm oil is an export oriented commodity priced in US$ while the cost of production is denominated in GHS.

Although operating expenses grew by 20.6%y/y to GHS5.99 million in 1H2019, the operating expense ratio (operating expenses/revenue) was just up by 10bps to 10.9% in 1H2019 from 10.8% in 1H2018. We attribute this to the implementation of cost control measures by the company to mitigate the adverse impact of lower CPO prices on margins.

BOOP's profit before tax grew by 19.6%y/y to GHS7.31 million in 1H2019 while profit after tax rose by 13.0%y/y to GHS6.22 million in 1H2019 on the back of the improvement in revenue and cost control measures that ensured that costs didn't rise significantly to erode margins.