Olam International reported on Friday that net profit dropped 2.9 per cent to $44.29 million for the three months to September 30, 2014, from $45.63 million in the year-ago period.
The mainboard-listed commodities trader attributed its lower earnings in the first quarter of is 2015 financial year to "adverse price movement in the hazelnuts and dairy businesses, coupled with execution challenges in upstream dairy."
Excluding exceptional gains, operating profit after tax and minority interests fell 29.4 per cent to $32.2 million.
The results included an overall reduction in fair value of biological assets of $19.2 million from a net gain of $3.3 million in the year-ago period to a net loss of $15.9 million in Q1 FY2015.
Olam reported negative free cash flow of $54.6 million compared to a positive $46.0 million in Q1 FY2014, driven largely by a $72.6 million increase in working capital, resulting from higher commodity prices.
Despite the increase in working capital, gearing of 1.85 times as at the end of Q1 FY2015 was in line with the FY2016 objective of below 2.0 times.
Olam's group managing director and chief executive office Sunny Verghese said: "With 15 of our announced 18 initiatives completed, we remain focused on executing our strategic plan. We continue to invest selectively in platforms prioritised for growth and we are confident that our investments, many of which are still in gestation, will be significant contributors going forward."