Wilmar posts 51% profit rise in Q1

A Wilmar International plantation in Sabah, Malaysia. The company's tropical oils business gained nearly 20 per cent in the first quarter.
A Wilmar International plantation in Sabah, Malaysia. The company's tropical oils business gained nearly 20 per cent in the first quarter.PHOTO: WILMAR INTERNATIONAL

Tropical oils, oilseeds and grains segments post strong showing

Wilmar International kicked off the year with a good performance in its oilseeds, grains and tropical oils businesses and higher contributions from its associates.

Gains from the agribusiness group's investment securities due to better stock market conditions boosted its first-quarter net profit by 51 per cent to US$361.6 million (S$509 million).

The group's revenue rose 17.4 per cent to US$10.6 billion from a year earlier, driven by higher commodity prices and strong sales by its tropical oils and sugar businesses.

Earnings per share came in at 5.7 US cents versus 3.8 US cents a year earlier, while net asset value per share was US$2.38 as of March 31, from US$2.29 as of Dec 31, 2016.

Get The Straits Times
newsletters in your inbox

No dividend was declared for the quarter.

The numbers were also helped by a net foreign exchange gain of US$25.9 million.

Wilmar's tropical oils business gained nearly 20 per cent to US$178.6 million for the quarter, buoyed by a stronger showing from refinery and plantation businesses, which benefited from higher crude palm oil prices.

  • AT A GLANCE

  • REVENUE: US$10.6 billion (+17.4%)

    NET PROFIT: US$361.6 million (+51%)

    DIVIDEND: Nil

Oilseeds and grains also performed well, with higher soya bean volume crushed and stable crushing margins offsetting weaker seasonal sales from its consumer products business, which was affected by the early Chinese New Year this year.

Higher sugar prices and increased sales due to higher merchandising activities fuelled a 60.5 per cent jump in sugar revenues to US$1.2 billion for the quarter.

Wilmar was helped by improved contributions from associates. Its share of results of joint ventures and associates jumped US$29.2 million to US$42 million, owing to higher contributions from the group's China associates and an absence of losses from its sugar associate in India.

Wilmar's total assets stood at US$37.36 billion, while shareholder funds were US$15.04 billion as of March 31. Operating activities resulted in net cash outflow of US$22.3 million. The group recorded cash inflow of US$771.5 million as of March 31.

Wilmar chairman and chief executive Kuok Khoon Hong said: "The group has shown strong results in the first quarter, particularly from our tropical oils, and oilseeds and grains segments.

"We expect our flour business to continue its growth, while the volume for consumer products is expected to recover from a seasonal reduction in the first quarter.

"Although lower crude palm oil prices will impact our plantation and palm oil mills operations, we believe 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."

The group is carrying out an internal restructuring of its China operations with the possibility of a separate listing, he added.

Wilmar's shares closed 1.2 per cent or four cents lower at $3.43.

A version of this article appeared in the print edition of The Straits Times on May 12, 2017, with the headline 'Wilmar posts 51% profit rise in Q1'. Print Edition | Subscribe