OKOMU OIL PALM : QUARTER 5 - FINANCIAL STATEMENT FOR 2022

THE OKOMU OIL PALM COMPANY PLC

REPORT OF THE DIRECTORS, AUDITED FINANCIAL STATEMENTS

AND

OTHER NATIONAL DISCLOSURES

FOR THE YEAR ENDED 31 DECEMBER 2022

THE OKOMU OIL PALM COMPANY PLC

Report of the Directors and audited financial statements for the year ended 31 December 2022

Table of Contents	Page
Corporate Information	3
Results at a glance	4
Chairman's report	5
Report of the Directors	8
Corporate governance report	14
Report of the audit committee	22
Certificate of account	23
Statement of Directors' responsibilities	24
Independent auditor's report	25
Statement of profit or loss and other comprehensive income	29
Statement of financial position	30
Statement of changes in equity	32
Statement of cash flows	33
Notes to the financial statements	34
Other national disclosures:
- Value added statement	73
- Five-year financial summary	74

THE OKOMU OIL PALM COMPANY PLC Corporate information

For the year ended 31 December 2022

Registered Company number Directors

Registered OfficePrincipal Place of BusinessCompany SecretaryIndependent AuditorsBankersForeign Bankers

SolicitorsRegistrarsManaging Agent

30894

Mr. Gbenga Oyebode MFR

Dr. Graham Hefer (South African) Mr. Arnaud Arhainx (French) Chief David Edebiri OON Mr. Peter Eguasa JP

Mr. Hubert Fabri (Belgian)

Mr. Regis Helsmoortel (Belgian) Mr. Sven Claeys (Belgian)

Mr. Asue Ighodalo

Mrs. Vivien Shobo

Mr. Philippe Fabri (Belgian)

Mrs. Isabelle Chevalley (Burkina Faso) Mr. Julien Bastrup-Birk (United Kingdom)Okomu Oil Palm Estate Okomu-Udo

Edo State

Okomu Oil Palm Estate Okomu-Udo

Edo State

P.C. Obi & Co. represented by Chukwuebuka Omerole

37 Norman Williams Street South-West Ikoyi

Lagos

Messrs. Ernst & Young 10th & 13th Floors, UBA House 57 Marina

Lagos

Access Bank Plc Polaris Bank Limited Zenith Bank Plc

Banque Cantonale de Fribourg Freiburger Kantonal Bank Chief Charles Adogah & Co (Solicitors & Advocates)

34 Oziegbe Street, New Benin Benin City

Cardinalstone Registrars Ltd. 358, Herbert Macaulay Way Yaba, Lagos

Socfinco F.R. S. A Squares des Places 3 1700

Chairman Managing Director Finance Director/CFO Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Non-Executive Director Independent Director Non-Executive Director Independent Director Independent Director

Fribourg Switzerland

THE OKOMU OIL PALM COMPANY PLC

Results at a glance

For the year ended 31 December 2022

2022	2021	% change
₦'000	₦'000
Revenue	59,323,723	37,394,507	59%
========	========
Profit before taxation	23,517,435	16,114,778	46%
Income tax expense	(7,286,629)	(4,575,810)	59%
----------------	----------------
Profit for the year	16,230,806	11,538,968	41%
========	========
Other comprehensive (loss)/income	(32,426)	560,687	(106%)
=======	=======
Total comprehensive income	16,198,380	12,099,655	34%
=========	=========
Net assets	34,033,866	34,051,956	(0)%
=========	=========
Employee's expenses	10,331,079	6,180,832	67%
=========	========
Number of employees	390	426
====	===
Basic earnings per share	17.02	12.10
=====	=====
Net asset per share	35.68	35.70
=====	=====
Share price	165	142

THE OKOMU OIL PALM COMPANY PLC

Chairman's report

My fellow shareholders, distinguished guests, ladies and gentlemen.

It is with great pleasure that I welcome you all to the 43rd Annual General Meeting of our Company and present to you the Annual Report and Financial Statements for the financial year ended 31st December 2022.

The Operating & Economic Environment for 2022

In 2022, Global economic activity experienced a wide and sharper-than-anticipated decline, with inflation higher than it had been in several decades. The global economy was severely impacted by the cost-of-living crisis, tightening financial conditions in most countries, rising interest rates, Russia's invasion of Ukraine, and the lingering Covid-19 epidemic in some sections of the world. The International Monetary Fund (IMF) predicted a global growth rate of 3.2% and inflation of 8.8% for 2022. The Nigerian economy experienced growth rates of 3.11%, 3.54%, 2.25%, and 3.52% in the first, second, third, and fourth quarters of 2022, respectively. The country's inflation rate increased to 21% in 2022, compared to an average of 10.6% for emerging and developing countries and 8.8% for the global economy. These Fiscal pressures were further exacerbated by the soaring cost of the petrol subsidy. Despite higher crude oil export revenues, the official reserves have declined, and the currency market has become severely skewed, which has negatively impacted the business environment and investment. This level of economic hardship, combined with the country's worsening insecurity, has hampered business growth.

In an effort to reduce the negative impacts of the attendant economic challenges, the Company minimized its costs, through the utilization of its newly fully commissioned 5mw turbine as an alternative means of generating power in 2022, and it produced over 44% of the power required in the Company's main estate. This enabled the Company to reduce its carbon footprint. Additionally, both 30t/hr oil mills were fully commissioned in Extension 2 by the end of 2022, helping to reduce transportation costs and preventing a decline in CPO quality owing to double handling and high FFA.

Despite the ongoing instability, both within and outside of the Country, the Commodity prices of both of our Company's products increased in 2022, which, to a degree helped to offset the huge inflationary increases being experienced by businesses in 2022.

Operating Results

Notwithstanding the fiscal pressures, we remained committed to enhancing the values that accrue to our shareholders while maintaining adequate capital to support the sustainable growth of our Company.

I am pleased to announce that our Company registered a total comprehensive income for 2022 of N16 billion, this being 34% higher than in 2021. This is largely driven by the 43% increase in CPO prices year on year (YoY), together with the 7% increase in rubber prices (YoY).

The CPO production was 13% lower than for the same period in 2021, whilst rubber production was 12% lesser (YoY). Consolidated turnover for the year increased YoY by 58%, while Direct costs increased by 64% YoY.

Dividends

The Board of Directors, pursuant to the powers vested in it by the provisions of section 426 of the Companies and Allied Matters Act (CAMA 2020) of Nigeria, proposed a final dividend of N12.00 per share, which in addition to the N9.00 per share paid as interim dividend amounts to N21.00 per share (2021: Interim dividend of N0.00 per share, final dividend of N8.00 per share and total dividend per share of N8.00) from the retained earnings account as at 31 December 2022. This will be presented for ratification by the shareholders at the Annual General Meeting. Payment of dividends is subject to withholding tax at the appropriate rate.

.