Agri-food giant Olam International plans to list Olam Food Ingredients (OFI) by the first half of next year as part of an ongoing business overhaul.

Olam is considering London for an initial public offering of OFI, Bloomberg reported yesterday, quoting unnamed sources. It said Olam could also consider a secondary listing in Singapore.

OFI - one of two operational arms Olam intends to demerge and list - consists of the company's cocoa, coffee, edible nuts, spices and dairy businesses.

The other unit, Olam Global Agri (OGA), comprises Olam's grains and animal feed, edible oils, rice, cotton and commodity financial services businesses.

Olam said it intends to continue exploring similar strategic options for maximising the value of OGA within the group.

It plans to complete the separation of OFI and OGA by the end of this year - and said it has made "good progress" towards doing so.

As part of its revamp, Olam said it is also evaluating a scheme of arrangement that would see its mainboard listing status move to a new holding company.

The group intends to demerge OFI by way of a distribution-in-specie of shares in OFI to Olam investors at the point of demerger, in conjunction with the listing.

Olam co-founder and chief executive Sunny Verghese said: "OFI is a truly global business and its independent listing is a critical first step in unlocking its long-term value."

In line with its profit warning last December, Olam separately reported a net loss of $87 million for the second half-year ended Dec 31, a reversal from its net profit of $85.8 million a year earlier.

It said its net loss was due to a one-off, non-cash impairment charge of $483.9 million on its investment in Olam Palm Gabon, which was offset in part by gains from divestments of deprioritised assets.

Excluding one-off exceptional items, net profit would have risen 90.1 per cent to $475.7 million.

Revenue for the second half grew 9.9 per cent to $18.74 billion from $17.05 billion a year earlier.

Olam remained profitable for the full year with earnings of $245.7 million, down 22.3 per cent from $316.2 million. Without net exceptional items, net profit would have grown 36 per cent to $677.8 million.

Full-year revenue increased 8.6 per cent to $35.82 billion, largely driven by contributions from OGA and OFI.

Olam said its commodity financial services business also contributed to the segment's improved performance for the year.

The board has recommended a final dividend of four cents a share compared with 4.5 cents a share in the previous year. It will bring the total dividend for 2020 to 7.5 cents a share, down from eight cents a share in 2019.

Olam shares closed down 1.8 per cent at $1.60 yesterday.

THE BUSINESS TIMES, BLOOMBERG