Olam performed 'below expectations' in 2018 amid tough market, says CEO

Revenue for the three months ended Dec 31 was $8.5 million, up 16.9 per cent on higher trading volumes.
Revenue for the three months ended Dec 31 was $8.5 million, up 16.9 per cent on higher trading volumes.PHOTO: OLAM INTERNATIONAL

SINGAPORE - Commodity trader Olam International posted on Thursday (Feb 28) a net profit of $75.3 million for the fourth quarter, down 71.6 per cent from the same period a year earlier in the absence of an exceptional gain of $155.4 million.

Operational Patmi (profit after tax and minority interest) fell 34.4 per cent to $72 million, as lower takings from the peanuts, coffee, rice and dairy businesses offset growth in cocoa, packaged foods and wood products.

Revenue for the three months ended Dec 31 was $8.5 billion, up 16.9 per cent on higher trading volumes.

Fourth-quarter earnings per share was 1.92 cents, down from 8.20 cents for the fourth quarter of 2017.

Group chief executive Sunny Verghese said: "Compared with a strong performance in the previous year, our 2018 performance has been below our expectations amid tougher than anticipated market conditions, particularly in the second half of the year."

He added: "Looking ahead, we are focused on executing on our strategic plan for 2019-2024 by investing in high-growth businesses in our portfolio where we have clear winnability. This will help us capitalise on key consumer trends, enabling us to achieve sustainable and profitable growth."

For the 2018 full year, Olam made a net profit of $347.8 million, down 40.1 per cent from 2017 despite a 16 per cent rise in revenue to $30.5 billion as the increased trading volumes from grains had a lower selling price than that of other products in the portfolio.

Excluding an exceptional gain of $149.2 million for 2017, operational Patmi was 19.7 per cent lower at $346.6 million.

A final dividend of four cents was declared, unchanged from a year ago. That brings total dividend to 7.5 cents per share for 2018, unchanged from 2017.

Net asset value per share was 193.38 cents as at end 2018, down from 200.05 cents as at end 2017.

Olam shares last changed hands at $2.01 on Wednesday before results were released.