Benso Oil Palm profit drops 47% as stronger cedi bites into dollar-linked revenue

Benso Oil Palm Plantation PLC has recorded a 47 per cent drop in profit for the first quarter ended March 31, 2026, falling to GH¢19.1 million from GH¢36.1 million in the same period last year, as the sharp appreciation of the Ghana cedi eroded the value of its dollar-referenced sales.

Revenue declined by 13.5 per cent to GH¢104.4 million from GH¢120.7 million a year earlier, despite the company reporting higher sales volumes. The contradiction between rising volumes and falling revenue points squarely to the exchange rate. Benso Oil Palm prices its products with reference to the United States dollar, meaning that even when shipments increase, the cedi equivalent of those sales shrinks when the local currency strengthens.

The cedi appreciated by nearly 29 per cent against the dollar over the past year, moving from GH¢14.70 at the end of March 2025 to around GH¢10.45 at the end of March 2026. That dramatic swing, while welcome news for importers and consumers, has been a direct hit to exporters like Benso Oil Palm who earn foreign currency but report in cedis.

Cost of sales rose to GH¢70 million from GH¢67.8 million, squeezing gross profit down to GH¢34.4 million from GH¢52.9 million. The gross margin contracted sharply from nearly 44 per cent to just 33 per cent, reflecting both the currency effect and potentially higher input costs for fresh fruit bunches, fertiliser, and mill operations.

Administrative expenses increased to GH¢12.2 million from GH¢11.5 million, adding further pressure to the bottom line. Other income fell to GH¢291,000 from GH¢942,000, eliminating what had been a modest buffer in the prior year.

Operating profit consequently dropped by nearly 47 per cent to GH¢22.5 million. A small increase in finance income to GH¢91,000 from GH¢5,000 did little to move the needle. The company paid GH¢3.4 million in taxes, down from GH¢6.2 million in 2025, reflecting the lower profit base.

Earnings per share fell accordingly to GH¢0.5486 from GH¢1.0384, a decline of 47 per cent that will concern investors who have come to expect steady returns from one of the Ghana Stock Exchange's more reliable agricultural counters.

Total assets expanded to GH¢281.5 million from GH¢224.9 million at the end of 2024, driven largely by a jump in cash and bank balances to GH¢68.9 million from GH¢91.3 million – though the comparative figure from 2025 appears anomalous. More significantly, trade and other payables surged to GH¢148.3 million from GH¢203.6 million, suggesting the company may be holding more cash to manage its dollar obligations or preparing for future planting and milling seasons.

Inventories increased to GH¢148.7 million from GH¢144.5 million, while trade and other receivables rose to GH¢116.6 million from GH¢67.5 million, indicating either higher credit sales to customers or slower collection cycles. Due from related parties also climbed to GH¢29.9 million from GH¢33.6 million.

On the liabilities side, trade and other payables fell to GH¢29.9 million from GH¢33.6 million, while amounts due to related companies dropped to GH¢28.7 million from GH¢34.7 million. Deferred tax liabilities, however, rose sharply to GH¢16.2 million from GH¢12.9 million, reflecting timing differences between book and tax accounting.

The company's income surplus account, which functions as retained earnings, stood at GH¢339.8 million at the end of March 2026, marginally lower than the GH¢341.2 million recorded a year earlier, as the sharp drop in quarterly profit offset the accumulated surplus from previous periods.

Looking ahead, Benso Oil Palm says it will continue to manage costs tightly at the plantation, mill and corporate levels, maintain good plantation practices to secure harvests and future yields, and enhance its capital structure with an optimal mix of equity and debt. 

The company remains confident that its strong business fundamentals will support steady returns for shareholders, but the outlook is clouded by macroeconomic uncertainty and the unpredictable path of the cedi.