Nigeria | NGX

The oil palm market in 2025 is expected to maintain elevated CPO prices, particularly in the first half, driven by robust demand from biodiesel mandates, festive seasons and geopolitical factors affecting some substitute oils. However, supply-side improvements, particularly from favourable weather conditions, may temper prices in the latter half of the year. Locally, we expect prices to remain elevated on account of rising demand and elevated FX rates, which bodes well for the local players.

Although sector installed capacity was mostly flat year over year in 2024, average energy generated improved by a marginal 2.2% to 4,280 MW in Q3'24 from 4,189 MW in 2023. This improvement was in spite of the challenges of grid collapses, infrastructure vandalism, liquidity constraints, and gas supply shortages in the period.

We maintain a favorable outlook for Total Energies Marketing Nigeria PLC (TOTAL). The company has successfully grown its topline to over a trillion Naira, driven by its leadership position within Nigeria’s downstream oil and gas sector as demonstrated in its robust FY’24 financial performance.

In its Q2'24/25 earnings, Guinness Nigeria Plc (GUINNESS) delivered its strongest quarterly performance in over a decade. The strong performance was aided by easing cost inflation and FX volatility, which we expect to positively cascade to other players in the sector in varying degrees. Given these favourable dynamics, we have revised our 12-month Target Price ("TP") upward to N96.57 (from N85.69) while maintaining our BUY recommendation.

PRESCO Plc (PRESCO) delivered a strong performance in FY'24, with revenue surging by 93.5% YoY, driven by favourable CPO prices, the partial consolidation of Ghana Oil Palm Development Company (GOPDC), and increased sales volumes.

System liquidity was robust in January 2025, as inflows from maturities, coupon payments, and FAAC totalled N3.07 trillion. This buoyant liquidity fueled strong buying interest at the short end of the curve and prompted banks to net deposit N236.16 billion at the CBN deposit discount window.