Presco H1-26: Weaker Pricing Weighs on Margins, …. Cordros Securities

• Elevated operating cost, with EPS dip

In its update on PRESCO following the release of its H1-26 results, Cordros Securities noted that the period was challenging, reflecting softer domestic crude palm oil prices and elevated operating costs.

It noted that revenue was broadly flat with 0.2% y/y growth, while EBITDA margin remained stable at 66.8% a +20bps y/y expansion while EPS declined by 20.2% y/y to NGN71.00/s.

Cordros Securities noted that for 2026E, it remained cautious with the expectation that the current operating pressures would persist through the remainder of the year.

“On this basis, we model a year-end TP of NGN1,526.14/s, implying a 25.7% downside from the current price of NGN2,055.30/s, and we assign a “SELL” rating on the stock.” Noted Cordros Securities.

The report explained that Cordros Securities view is underpinned by:, muted 2026E revenue growth of 0.6% y/y, as a 16.7% y/y decline in average realised CPO prices largely offsets a 17.7% y/y volume growth;

The view was also bazed on a 13.24ppts y/y contraction in EBITDA margin to 57.3%, reflecting faster growth in COGS (+9.8% y/y) and OPEX (+40.2% y/y).