Presco – Another impressive quarter expected in Q3

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Presco - Another impressive quarter expected in Q3

Supported by higher CPO prices due to the continued land border closure and improved demand caused by increased adherence to proper hygiene practices, Presco reported a 29% y/y jump in top line in the first half of the year.

With domestic CPO demand expected to have remained strong and global CPO prices jumping 24% q/q to $657.36/MT in Q3’20, we forecast a 60% y/y jump in Revenue to ₦7.7 billion, albeit 5% lower q/q.

Presco - Another impressive quarter expected in Q3

Furthermore, supported by higher prices and cost containment strategies, we forecast a 15ppts y/y rise in EBIT margin to 42% in Q3’20. However, dragged by inflationary pressures, the margin is expected to come in 5ppts weaker q/q.

In absolute terms, EBIT is expected to have jumped 145% y/y to ₦3.2 billion, albeit 15% lower q/q.

Overall, Presco’s PAT is expected to rise by 219% y/y to ₦2.0 billion (Q2’20: ₦2.7 billion).

Presco - Another impressive quarter expected in Q3 Brandspurng
Source: Company Fillings, Vetiva Research