Agri-business Olam International trebled earnings in the first quarter, thanks to the lower exceptional charges it had to pay on the buyback of bonds.
Net profit for the three months to March 31 surged 212.8 per cent to $113.6 million, up from the $36.3 million in the same period a year earlier, it reported yesterday.
Olam bought back high-priced bonds worth $12.5 million during the quarter, lower than its buyback of $97.2 million in the first quarter last year.
Excluding the exceptional items, net profit dropped 5.5 per cent to $126.1 million, partly due to lower contributions from edible nuts, spices and vegetable ingredients and commodity financial services.
Revenue rose 10.2 per cent to $4.76 billion, with sales volumes expanding 10.5 per cent.
As a result of various initiatives to optimise debt tenure and reduce cost of borrowing, Olam recorded lower net finance costs of $99.4 million, a 19.3 per cent improvement from a year earlier, despite growth in invested capital.
Earnings per share for the quarter came in at 3.95 cents, much higher than the restated 1.32 cents previously. Net asset value per share stood at 178.74 cents as at March 31, down slightly from the restated 179.75 cents as at Dec 31.
AT A GLANCE
NET PROFIT: $113.6 million (+212.8%)
REVENUE: $4.76 billion (+10.2%)
Chief executive Sunny Verghese told a briefing yesterday that the long-term prospects for the group's businesses continue to be positive. "There will likely be a growing supply and demand imbalance for agriculture raw materials", he said, citing factors such as the growing global population, rising per capita income and changing dietary habits.
But the outlook for the nearer term remains a mixed bag, given the "ample supplies, and therefore declining prices".
Still, Mr Verghese added: "Our consistent performance amid challenging market conditions and uneven global growth reflects our sound business fundamentals and our diversified portfolio.
"We are confident about our growth prospects, on the back of our acquisition of ADM's cocoa processing assets, BUA Group's wheat milling assets, our entry into the animal feed business in Nigeria and our new joint venture with Mitsubishi Corporation in Japan. These initiatives will open up new opportunities and revenue streams as we continue to execute on our differentiated strategy."
Olam shares closed 1.5 cents or 0.9 per cent lower at $1.60 yesterday, after results were announced.