A downward revaluation of investment securities in line with sliding equity markets drove third-quarter net profit lower at agribusiness group Wilmar International.
Net profit for the three months to Sept 30 fell 34.7 per cent compared with the same period a year earlier to US$275.9 million (S$392.5 million). Revenue fell 7.6 per cent to US$10.65 billion.
Revenue fell mainly as a result of lower commodity prices, said Wilmar in a statement. Loss from non-operating items widened to US$78.9 million from US$5.2 million last year. This was caused mainly by higher investment losses, it said.
AT A GLANCE
NET PROFIT: US$275.9 million (-34.7%)
REVENUE: US$10.65 billion (-7.6%)
The portfolio, however, had recovered by approximately US$23.8 million last month, it added.
Cumulatively, the rate of returns from the group's investment securities was higher than the group's borrowing costs, it also said.
Profit before tax for the oilseeds and grains business grew 38.6 per cent to US$243.6 million. This was due to higher volumes and better margins for the soya bean crushing and consumer products businesses, Wilmar said.
In the tropical oils business, pre-tax profit fell 45.9 per cent to US$105.1 million. This was because of declining crude palm oil prices and lower margins from the refining and downstream businesses, the group said.
Pre-tax profit for the sugar business fell even though sales had improved. Margins were hit by a weakening in the Australian dollar, Wilmar said.
Earnings per share for the three months was 4.3 US cents, down from 6.6 US cents last year.
Net asset value per share was US$2.35 as at Sept 30, down from US$2.42 as at Dec 31.
Chairman Kuok Khoon Hong, said the group expected performance of the oilseeds and grains business to "remain satisfactory". Mr Kuok, also the chief executive, said product margins for the tropical oils business should also improve.
The recent increase in crude palm oil prices would also improve plantation margins, he said.
The group's sugar milling segment would gain from "the recent surge in sugar prices on the back of anticipated sugar deficit in the coming year", he added.
"Overall, we remain optimistic that performance for the remainder of the year will be satisfactory."
The results were announced after the market closed.
The counter fell two cents or 0.65 per cent to close at $3.05 yesterday.