Olam Q3 profit falls 8.6% on higher depreciation and amortisation charges

Olam said its sales volumes were up 16.4 per cent for the three months to Sept 30 as all segments except confectionery & beverage ingredients showed growth.
Olam said its sales volumes were up 16.4 per cent for the three months to Sept 30 as all segments except confectionery & beverage ingredients showed growth.PHOTO: OLAM INTERNATIONAL

SINGAPORE - Singapore-based commodity trader Olam International reported an 8.6 per cent fall in third-quarter profit to S$20.5 million, from S$22.5 million in the year-ago period, on higher depreciation and amortisation charges.

Olam said its sales volumes were up 16.4 per cent for the three months to Sept 30 as all segments except confectionery & beverage ingredients showed growth.

Revenues rose by 6 per cent as lower prices for some commodities offset the higher volumes.

But depreciation and amortisation charges jumped 43.5 per cent to S$82.56 million. The cost of goods sold rose 7.5 per cent to S$4.26 million.

Olam, whose biggest shareholders are Temasek Holdings and Japan's Mitsubishi Corp, is a major player in a number of commodities including cocoa, coffee and edible nuts.

Looking ahead, Olam said: "The long-term trends in the agri-commodity sector remain attractive, and Olam is well positioned to benefit from this as a core global supply chain business with selective integration into higher value upstream and mid/downstream segments."

Olam executive director and group COO A Shekhar said the company has taken several steps during the quarter to further strengthen its balance sheet, including a benchmark perpetual bond issuance, tap of its senior bonds and refinancing of its syndicated loans.