Plantations giant Wilmar International ekes out 2.5% rise in Q3 earnings to $520 million

A larger demand for palm and laurics and a higher volume of sugar produced has boosted third-quarter earnings for plantations giant Wilmar International.

Net profit rose 2.5 per cent to US$416 million (S$520 million), despite revenue falling 4.2 per cent to US$11.8 billion for the three months to Sept 30.

Most of the segments of Singapore-listed Wilmar recorded volume growth and higher profits during the period.

Margins for its palm and laurics arm improved through economies of scale from expansion in Wilmar's integrated facilities as well as contributions from high value-added downstream products.

Its sugar segment did well because of good crushing volumes in Australia due to the dry and favourable weather conditions.

The plantations and palm oil mills unit, however, dragged down the quarter's performance. Profit before tax for the unit fell 50.3 per cent in the quarter to US$57.9 million due to drops in its production and average selling price.

"Production yield was down as a result of low crop trend in Sarawak, delayed peak harvest season for Sabah, as well as dry weather in Kalimantan and Sumatra," it said in a statement on Thursday.

Chairman and chief executive Kuok Khoon Hong said: "Our investments in recent years in capacity expansion, new businesses and downstream products have enabled Wilmar to realise volume growth and to maintain margins amidst low (crude palm oil) prices.

"We remain focused on improving our business model and are positive about being able to capture growth opportunities and to grow profit as the global operating environment stabilisies."

Earnings per share increased from 6.3 US cents a year earlier to 6.5 US cents, while net asset value per share rose 5.5 cents to US$2.298 from Dec 31 last year.

Wilmar shares closed three cents up at $3.45 on Thursday.