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CAPITAL STRUCTURE AND PROFITABILITY OF SELECTED PALMOILAGRO-ALLIED FIRMS IN NIGERIA: PRESCO PLC AND OKOMUOIL PLC (2010-2024)
Author(s): Aniekan J. Akpaeti , Nsikan E. Bassey , Matthew N. Ekaette and Magdalene N. Archibong
Volume/Issue: Volume 6 , Issue 1(2026)
ABSTRACT:
This study compares the profitability and firm-characteristic profiles of Presco Plc and Okomu Oil Plc over 2010–2024 using audited financial statements. Profitability was evaluated with gross profit margin (GPM), operating profit margin (OPM), and return on assets (ROA), and cross-firm differences were tested with independent-samples t-tests. The results showed no statistically significant difference in mean GPM (0.273), OPM (0.164), or ROA(0.254) between the firms at the 5% level, even though Okomu exhibited a higher and steadier average ROA and Presco exhibited greater volatility captured in 2016 (56.837). Sectoral policy shocks (foreign-exchange restrictions, import tariffs, and border closures) shaped margins for both firms and helped to explain the observed swings. For firm characteristics, only board size (1.00598E-05) differed significantly between the companies; No of employees, revenue, and dividend payments did not differ significantly. Economically, the firms’ profitability profiles were statistically indistinguishable across the sample, whereas governance structures (as proxied by board size) diverged in a manner consistent with differences in organizational scope and oversight needs. The findings imply that comparative performance narratives in this period rested less on scale or dividend policy and more on asset utilisation, cost discipline, and governance design in a policy-sensitive market. The t-tests detect no significant differences in mean GPM, OPM, or ROA; therefore, it is recommended that management and investors should avoid prescriptive strategy changes premised on presumed cross-firm profitability gaps. Instead, treat both firms’ profitability as statistically indistinguishable over the sample horizon, and prioritise internal controls to address documented volatility
KEYWORDS:
Agro-Allied Companies, Profitability, Firms Capital Structure, Gross Profit Margin (GPM),Operating Profit Margin (OPM), Return on Assets (ROA).
