Olam Q3 net profit drops 30% as grains, sugar sales decline

Olam International's Storage and Distribution van (left) and warehouse (right).
Olam International's Storage and Distribution van (left) and warehouse (right). PHOTO: OLAM INTERNATIONAL

SINGAPORE (BLOOMBERG) - Olam International, the Singapore commodity trader controlled by Temasek Holdings, reported a 30 per cent drop in earnings for its third-quarter ended Sept 30, after sales of grains, sugar and rice declined.

Net income was S$31 million compared with S$44.3 million a year earlier, Olam said on Friday (Nov 13) in a statement. Revenue rose 4 per cent to S$4.47 billion. Operational profit after tax and minority interest, which doesn't count one-time items, rose 6.2 per cent to S$34.2 million.

Revenue from staple and packaged food dropped 31 per cent in the quarter on lower sales prices and volumes of grains, sugar and rice.

The trading firm has sold stakes in Australian grain and its packaged food businesses, while expanding in cocoa. Already one of the world's top three traders of coffee and rice, Olam paid a company record US$1.2 billion to Archer-Daniels-Midland Co. for its cocoa business to become the world's third-largest processor of the bean.