Ghana: BOPP’s earnings continue to benefit from higher CPO prices

Benso Oil Palm Plantation (BOPP) has reported a topline growth of 29.5%, against 20.9% in the same period of 2019, to GH¢123.82 million in 2020 on the back of higher palm oil prices emanating from increased demand from China and India as well as production squeeze arising from labor shortages in key producing countries in the midst of the COVID-19 pandemic. Commodity data from the World Bank shows that the price of Crude Palm Oil (CPO) rose by 33.1% to US$ 1,016.37 per MT in 2020 while that of Palm Kernel Oil was up by 26.3% to US$ 1,224.87 per MT. Although operating expenses grew by 16.6% in 2020, compared to 2.2% in 2019, to GH¢11.19 million in FY2020, the growth was still below revenue growth. This helped to reduce the operating expense ratio (operating expenses/revenue) by 100bps to 9.0% in 2020 from 10.0% in 2019. BOPP’s profit margins were enhanced by the rise in revenue plus the drop in the operating expense ratio. Profit before tax jumped by 124.8% to GH¢ 29.39 ...