SINGAPORE (May 11): Agribusiness Wilmar International reported a 51% rise in 1Q earnings to US$361.6 million ($509 million).
Chairman and CEO Kuok Khoon Hong also announced that the group is carrying out an internal restructuring of its China operations with the possibility of a separate listing.
“As the proposed listing is still at evaluation stage, shareholders are advised to exercise caution in trading their shares. There is no certainty or assurance as at the date of this announcement that the listing proposal will be carried out,” added Kuok.
Revenue increased 17% to US$10.57 billion mainly driven by higher commodity prices and stronger sales volumes for Tropical Oils and Sugar businesses.
The strong result reflected good performance from Oilseeds & Grains and Tropical Oils as well as higher contributions from the group’s associates as well as gains from the group’s portfolio of investment securities, due to improved conditions in equities markets.
Tropical Oils (Plantation, Manufacturing & Merchandising) achieved a 20% increase in pretax profit to US$178.6 million, mainly attributable to better performance from both the refinery and plantation businesses, with the latter benefitting from higher crude palm oil (CPO) prices.
Share of results of Joint Ventures & Associates increased by US$29.2 million to US$42.0 million. This was due to higher contributions from the group’s China associates and absence of losses from its sugar associate in India.
Oilseeds & Grains (Manufacturing & Consumer Products) continued its positive performance from the second half of 2016 and posted a 27% increase in pretax profit to US$213.7 million.
The strong result was achieved on the back of higher soybean volume crushed and stable crushing margins. This was partially offset by weaker seasonal sales volume from the Consumer Products business, which was affected by the early Chinese Spring Festival in 2017.
Sugar (Milling, Merchandising, Refining and Consumer Products) reported a pretax loss of US$34.5 million, mainly due to seasonal maintenance in the first half of the year by the Australian Milling business and weaker performances from both the Merchandising and Refining businesses.
Kuok said, “The Group has shown strong results in the first quarter, particularly from our Tropical Oils and Oilseeds & Grains segments. We expect our Flour business to continue its growth, while volume for Consumer Products is expected to recover from the seasonal reduction in 1Q2017. Although lower CPO prices will impact our Plantation and Palm Oil Mills operations, we believe that this will be partially offset by anticipated higher palm oil production. Recent volatility in sugar prices is expected to impact our Sugar operations. Overall, we are cautiously optimistic that the next quarter’s performance will be satisfactory.”
Shares of Wilmar closed 4 cents lower at $3.43 on Thursday.
