Olam International has posted 1HFY2021 ended June earnings of $421.5 million, up 26.7% y-o-y from $332.7 million on strong operating profit growth and lower net finance costs.
Revenue for the 1HFY2021 increased 33.7% y-o-y to $22.8 billion, in tandem with group sales volume increasing 11.5% y-o-y to 22.4 million metric tonnes, driven by strong growth for both Olam Food Ingredients (OFI) and Olam Global Agri (OGA).
EBIT for the period grew 51.4% y-o-y to $641.6 million, with OFI’s EBIT up 22.9% y-o-y while OGA’s EBIT was up 58.9% y-o-y.
1HFY2021 operational PATMI, which excludes non-recurring exceptional items, increased 116% y-o-y to $436.6 million, Olam’s highest since inception.
Olam had recorded net exceptional losses of $15.1 million for the 1HFY2021 mainly due to one-off exit and closure costs of de-prioritised assets and cost incurred for the acquisition of Olde Thompson, offset in part by a gain from a partial stake sale of Indonesian cocoa plantation PT Sumber Daya Wahana.
See also: Olam rights issue 118% subscribed, raises $601.7 mil
Olam’s cash position stood at $3.5 billions at end-1HFY2021, with ample liquidity of $18.6 billion and gearing at 1.60 times, below its target of 2 times.
“Even as we deployed significant capital expenditure for organic growth and strategic acquisitions, we continued to maintain a robust balance sheet, further strengthened by the recently concluded rights issue,” says Olam Group CFO, N Muthukumar.
“We continued to diversify funding sources and innovate on financing, including a unique two-tier AtSource-linked sustainability financing facility aggregating US$1.45 billion. We continue to make good progress on our Re-organisation Plan and will formalise the cost plans and capital structure for OFI and OGA, to meet their respective needs, while driving profitable growth and improving returns,” he adds.
The board of directors has declared an interim dividend of 4 cents per share,m higher than the 3.5 cents declared in 1HFY2020.
Following the announcement of its results, Olam also announced that OFI is seeking a primary listing on the premium segment of the London Stock Exchange (LSE) with a concurrent listing on the Singapore Exchange ; the IPO and concurrent demerger of OFI remains on course for 1H2022
“We continue to execute our Re-organisation with OFI’s planned concurrent listings in London and Singapore, representing the best combination of listing venues. We are excited about the prospects of listing OFI as an attractive play for the growing demand for natural, plant-based ingredients and value-added solutions, which are sustainably sourced and traceable,” says Sunny Verghese, Olam co-founder and group CEO.
A. Shekhar, CEO of OFI comments: “The decision to pursue a stock market listing is a major milestone for OFI and we are looking forward to presenting this exciting opportunity to investors globally through a proposed primary listing in London and a concurrent secondary listing in Singapore. The primary listing on the LSE will give us access to London’s large and diverse investor base, with its deep and liquid capital markets, and enable us to benefit from its strong understanding of and research coverage across the food and beverage sector. The concurrent listing in Singapore will also enable us to retain our strong local shareholder base and further tap into growing investor appetite in Asia.
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In 2020, OFI generated annual revenues of US$9.1 billion and EBIT of US$0.6 billion.
Olam also disclosed that OGA is evaluating various strategies to maximise its long-term growth potential and value enhancement within thegGroup, including a potential IPO and concurrent demerger from the Group in 1H2023
Shares in Olam closed up 4 cents or 2.86% higher at $1.44 on August 12.
Photo: Olam International
