PRESCO Plc 9M/Q3:2025 Earnings Note | Solid 9M Performance Despite Seasonal Headwinds
Key TakeawaysRevenue Softens on Seasonal Lull: Revenue declined
27.8% QoQ to NGN75.76bn due to the lean season, though
YoY growth remained strong at +113.51%, supported by
firm CPO prices and higher output capacity.
Cost Pressures Intensify Sequentially: Cost of sales grew
100.7% YoY to NGN72.4bn and 163.0% QoQ to NGN46.02bn,
reflecting replanting expenses, higher logistics costs, and
the full consolidation of GOPDC operations. The
frontloaded production strategy geared toward meeting
demand in the lean months also amplified cost
recognition in Q3. Consequently, gross profit declined
66.9% QoQ but rose 118.5% YoY, with gross margin
improving to 75.4% (+82bps YoY).
Margins remain resilient: Despite higher replanting costs,
gross margin improved to 73.6% (from 71.9% in 9M:2024),
while operating margin rose to 60.5% (+2.2ppts YoY),
reflecting solid pricing and cost control.
FX gains offset finance cost surge: Despite a 255.3% YoY
rise in finance costs tied to loan repayments, Presco
recorded an FX gain of NGN5.97bn, reversing Q2’s
NGN3.96bn loss.
Profit Moderates QoQ but Doubles YoY: Net profit stood
at NGN22.05bn, down 46.4% QoQ, reflecting seasonal
weakness and cost spikes. Still, 9M:2025 PAT rose 114.7%
YoY to NGN110.79bn, underscoring resilient fundamentals.
Healthy Balance Sheet Expansion: Total assets rose 29%
YTD to NGN612.82bn, buoyed by higher PP&E and cash
holdings (NGN93.01bn). Borrowings and payables
increased to NGN148.23bn and NGN172.16bn, respectively,
reflecting ongoing growth and working capital needs.
Valuation: We maintain a BUY rating on Presco Plc with a
target price of NGN1,862.49 /share, representing an
upside potential of 25.80% from the closing price
(NGN1480) of October 24, 2025
ARM Securities Limited is a full-service brokerage house that offers best-in-class brokerage services to local as well as foreign private and institutional investors. Formerly known as Hamilton Hammer, the Company commenced operation in 1994 and was acquired by ARM Investment Managers in 2008--an acquisition which has successfully re-positioned the company as a recognized brokerage firm in Nigeria. The Company is a dealing member of the Nigerian Stock Exchange (NSE) and is regulated by Securities and Exchange Commission (SEC). ARM Securities research team provides insightful commentaries on the Nigerian economy and its equity and debt markets using an approach which incorporates a thorough understanding of the fundamentals of the industries and companies under coverage. The research therefore adopts an integrated methodology of top-down analysis and bottom-up stock selection, which focuses on publicly quoted companies on the Nigerian Stock Exchange that are judged to offer the highest potential for earnings growth. In addition, its analysts provide periodic commentaries on a range of topical global and local issues which provide investing clients with a holistic view of the opportunities and risks in today’s financial market landscape.
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