Wilmar International has reported net profit of US$450.2 ($597.0 million) for the 1QFY2021 ended March, around double the net profit of US$224.1 million in the corresponding period the year before.
The quarter’s net profit is the group’s highest first quarter since its listing.
The group’s core net profit rose 38.1% y-o-y to US$423.7 million.
Revenue for the 1QFY2021 increased by 30.6% y-o-y to US$14.26 billion, while EBITDA improved by 53.7% y-o-y to US$1.09 billion.
The higher figures were attributable to the group seeing growth in all core segments in both revenue and profits, on the back of strong performances across the board.
The quarter’s results were further boosted by a reversal of mark-to-market losses on hedging derivatives recorded in the 4QFY2020.
Furthermore, Wilmar logged good manufacturing margins in the Feed & Industrial Products segment.
Profit for the Plantation & Sugar Milling segment saw growth in the 1QFY2021, which was supported by stronger commodity prices during the period.
The capitalization of maintenance costs during the sugar milling off-season also contributed to the segment’s profit.
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The group’s associates and joint ventures as well as non-operating from its investing activities contributed to the higher profit as well.
Wilmar's 89.99%-owned subsidiary Yihai Kerry Arawana (YKA) posted earnings of RMB1.57 billion ($321.1 million) during the quarter, 29.12% higher y-o-y. YKA's revenue increased 28.0% y-o-y to RMB51.09 billion, while profit before tax more than doubled to RMB2.81 billion.
Sales for Wilmar’s Food Products grew by 13.1% y-o-y to 7.0 million metric tonnes (MT), mainly due to the 19.8% y-o-y growth in Medium Pack and Bulk as well as 2.8% y-o-y growth in Consumer Products.
According to Wilmar, a shift in consumer preference towards better quality food products contributed to the growth in the Consumer Products segment.
Feed and Industrial Products saw 1.5% y-o-y higher sales at 11.8 million MT. This was attributable to a 16.9% y-o-y boost in Sugar due to strong sugar merchandising activities during the quarter and, offset by lower sales in Oilseeds and Grains, as well as Tropical Oils due to lower soybean crushing activities.
Food products from Wilmar’s Hotel/Restaurant/Catering (HORECA) and food processing industries benefited from China’s strong recovery from the Covid-19 pandemic in 2020, as more people dined out during the quarter.
Cash flow from operating activities fell 95% y-o-y to US$96.4 million due to higher commodity prices driving an increase in working capital requirements during the quarter.
“We achieved good results to start the year in a challenging market environment. We will continue to strengthen our existing operations and build new complementary businesses which will help in our long-term growth,” says the group in an April 29 statement.
“The sustained high palm oil price is expected to benefit our Oil Palm Plantation business in the coming months although it will have an impact on our manufacturing margins. Earnings in the Feed & Industrial Products segment will likely be lower due to lower crush margins. However, higher sugar price will benefit our sugar milling business.”
It adds that its operations in India and Myanmar have not experienced “significant disruptions” and that it will continue to monitor the situation closely.
“Whilst the pace of economic recovery around the world from the pandemic is uneven, we are cautiously optimistic that we will perform satisfactorily for the rest of the year,” it says.
Shares in Wilmar closed 3 cents higher or 0.6% up at $5.30 on April 29.
