SINGAPORE - Olam International, the commodities firm controlled by Singapore state investment fund Temasek Holdings, swung to a loss in the fourth quarter after writing down its investment in Malaysian Stevia sugar substitute maker, PureCircle Ltd (PCL).
Olam posted a loss of S$221.3 million for the three months to Dec 31 from a net profit of $118.7 million for the year-ago quarter, despite revenue rising 11.7 per cent to S$5.44 billion, the company announced on Monday (Feb 29).
Olam said it took a S$192.6 million charge for its investment in PCL, as advised by its auditors on Feb 25, because of the "significant and prolonged decline in the share price of PCL".
The auditors has advised that the non-cash fair value change of S$192.6 million, previously recorded under 'other comprehensive income', be reclassified in the profit-and-loss statement instead.
Olam said that given the timing of the auditor's advice, it could not provide prior notification of the impact of this change ahead of the company's scheduled release of its un-audited results on Monday.
"The company continues to believe in the long-term strategy, competitive position and growth prospects of PCL," Olam said.
There were also exceptional losses of expenses of S$76.9 million in its New Zealand Farming Systems Uruguay (NZFSU) dairy restructuring and herd revaluation, one-time transaction expenses of S$34.1 million for its ADM Cocoa acquisition and its S$23.5 million buyback of convertible bonds.
The losses were partly offset by the S$33.6 million gain on the sale-and-leaseback of Palm plantations in Gabon.
Olam said that it achieved strong underlying performance with operational profit after taxes and minority interests (PATMI after excluding exceptional items) up by 16.2 per cent to S$88.2 million for Q4, and up 20.1 per cent to S$346.2 million for 2015.
For full-year 2015, Olam suffered a loss of S$64.3 million from S$591.0 million in the previous year.
A final dividend of 3.5 cents per share was recommended, bringing total dividend for the 18-month financial year ended Dec 31 to 6.0 cents per share, compared to a total payout of 7.5 cents for year-ago period.