Olam Group VC2 has reported earnings of $200.0 million for the 2HFY2022 ended Dec 31, 2022, 24.5% lower than earnings of $264.9 million in the corresponding period the year before.
The lower y-o-y earnings came as net finance costs doubled despite the higher y-o-y revenue.
This brings the group’s FY2022 earnings to $629.1 million, 8.4% lower y-o-y. This time, the decline was attributed to the strong base seen in the FY2021.
In the 2HFY2022, sale of goods & services, or revenue, increased by 9.5% y-o-y to $26.5 billion. The y-o-y decline was attributable to the higher sale of goods and offset by the lower sale of services.
Net gain from changes in fair value of biological assets increased by 53.1% y-o-y to $115.6 million.
Finance costs increased by 79.5% y-o-y to $522.4 million.
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Share of results from joint ventures and associates fell by 23.8% y-o-y to $10.7 million.
Profit before tax fell by 23.0% y-o-y to $236.7 million.
In the FY2022, sale of goods & services increased by 16.8% y-o-y to $54.9 billion due to the higher sale of both goods and services during the year.
Net gain from changes in fair value of biological assets increased by 31.3% y-o-y to $90.9 million.
Finance costs increased by 60.2% y-o-y to $849.6 million.
Share of results from joint ventures and associates grew by 38.3% y-o-y to $27.4 million.
Profit before tax fell by 1.3% y-o-y to $727.2 million.
As at Dec 31, 2022, cash and cash equivalents stood at $4.6 billion. Earnings per share (EPS) for the 2HFY2022 and FY2022 stood at 4.72 cents and 15.37 cents respectively.
A second and final dividend of 4.5 cents per share has been recommended for the period. This brings the group’s full-year dividend to 9.5 cents per share, unchanged from the year before.
“We delivered operational patmi of S$781.5 million against a strong prior year and saw revenue and ebit growth in 2022, despite the challenging environment that we are operating in. Our discipline in executing our strategy has enabled us to ride industry tailwinds to deliver strong operating performance, with Olam Agri in particular, delivering another strong year,” says Sunny Verghese, Olam Group co-founder and CEO.
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“The Olam Group is now at the cusp of transformational growth as all three operating groups have been repositioned to tap into the growing demand in their respective sectors. In the year ahead, we expect both Olam Agri and ofi to continue their growth momentum, capitalising on industry trends, the reopening of economies and the easing of supply chain disruptions,” he adds.
The group intends to list Olam Agri by as early as the 1HFY2023, while ofi is slated to list on the London Stock Exchange with a concurrent listing on the Singapore Exchange (SGX) after the IPO of Olam Agri.
The rest of the group will remain listed on the SGX upon completion of the various IPOs.
“Even as the industry grappled with increased working capital needs due to higher commodity prices, we maintained discipline in our use of capital and reduced our gearing while generating strong operating cash flows. We will continue to explore sustainability-linked facilities aligned to our purpose to fund our growth plans,” says CFO N Muthukumar.
Shares in Olam Group closed $1.60 on Feb 24.
