SINGAPORE (Feb 22): Wilmar International saw its earnings fall 23.8% to US$427.5 million ($564.6 million) for the 4Q ended December, from US$560.8 million a year ago.
This brings full year earnings to US$1.22 billion for FY17, some 25.4% higher than FY16 earnings of US$972.2 million.
Excluding the gains from the group’s investment portfolio, core net profit was lower for the quarter at US$373.9 million.
Gross profit fell 32.7% to US$957.8 million in 4Q17, as cost of sales for the quarter increased marginally by 0.6% to US$10.59 billion as a result of foreign exchange losses.
4Q17 revenue slipped 3.3% to US$11.55 billion, from US$11.95 billion a year ago. This was in line with lower sales volume and lower average selling prices during the quarter.
Finance income rose 73.1% to US$80.3 million in 4Q17, led by higher average deposits and effective interest rates during the quarter.
In 4Q17, Wilmar recorded a net gain on other operating items of US$139.9 million, compared to a loss of US$158.3 million a year ago. This was mainly due to foreign exchange gains.
The strong equity markets during the last quarter of the year led the group to record gains in its investment securities, bringing gains in non-operating items to US$65.5 million in 4Q17, compared to a US$18.7 million loss a year ago.
Wilmar’s Oilseeds & Grains (Manufacturing & Consumer Products) segment registered an improvement of 16% in pre-tax profit to US$206.5 million in 4Q17, from US$177.9 million a year ago.
The strong performance was driven by good crush margins and strong sales in Manufacturing.
Overall sales volume increased 23% to 9.2 million MT in 4Q17, from 7.5 million MT a year ago.
The increase was partially offset by a 43% decrease in pretax profit to US$104.9 million from its Tropical Oils (Plantation, Manufacturing & Merchandising) segment in 4Q17.
This was mainly due to lower processing margins in the downstream business, and exacerbated by lower production yield and crude palm oil (CPO) prices during the quarter.
Its Sugar (Milling, Merchandising, Refining & Consumer Products) segment also reported a 70% decrease in pre-tax profit to US$41.4 million in 4Q17, from US$135.9 million a year ago.
This was mainly due to the timing effect of the new Sugar marketing programme in Australia which came into effect in FY17.
Share of results of joint ventures and associates increased by 66% to US$111.9 million in 4Q17, mainly from the group’s China and African investments.
As at end December, cash and cash equivalents stood at US$1.44 billion.
The board has proposed a final dividend of 7 cents per share. Including the interim dividend of 3 cents per share paid earlier, this brings the total dividend for FY17 to 10 cents per share – some 54% higher than FY16 dividend of 6.5 cents per share.
“Our portfolio of high quality agribusiness enabled the group to do well in 2017. Looking ahead, we expect our integrated business model to continue to achieve sustained growth,” says Kuok Khoon Hong, chairman and CEO of Wilmar.
“In the meantime, we continue to work on the proposed listing of our China operations, with the internal restructuring of the operations largely completed,” he adds.
Shares of Wilmar closed 4 cents lower at $3.04 on Thursday.
