Wilmar first-half profit rises 5.2% to $763.4 million

SINGAPORE - Agribusiness giant Wilmar International on Aug 13 reported a net profit of US$579.6 million (S$763.4 million) for the first half ended June 30, up 5.2 per cent from US$550.9 million in the year-ago period.

This was attributed to better performance from the feed and industrial products, as well as food products segments. The gains were partially offset by lower contributions from joint ventures and associates, and sugar milling operations.

Excluding losses from non-operating items, net profit would have been US$606.3 million, up 5 per cent year on year from US$577.2 million.

Earnings per share was 9.3 US cents for the six months, up 5.7 per cent from 8.8 US cents.

The group declared an interim dividend of six cents per share, which it maintained from 2023. The dividend will be paid on Aug 29.

Revenue slid 4.9 per cent to US$30.9 billion, from US$32.5 billion, as commodity prices fell. The decline was cushioned by higher sales volume over the period.

Among its segments, feed and industrial products benefited from higher crushing volume and improved margins in the second quarter of financial year 2024. Wilmar does oilseed crushing of several varieties, including soya bean, rapeseed, groundnuts and sesame seeds.

The segment had a 33.9 per cent increase in pre-tax profit to US$534 million in the first half of financial year 2024, from US$399 million a year ago.

“Further, the increase in sales volume in consumer products, accompanied by lower feedstock costs, resulted in a 76.9 per cent improvement in the food products segment,” said the group. Pre-tax profit for food products was US$146.3 million, compared with US$82.7 million in the first half of financial year 2023.

In line with the decrease in commodities prices and lower seasonal working capital requirements, net loans and borrowings were reduced by US$434.2 million to US$17.2 billion as at June 30, noted Wilmar. Gearing therefore improved to 0.87 times, from 0.88 times.

Commenting on the results, Wilmar chief executive and chairman Kuok Khoon Hong said: “Refining margins for tropical oils are expected to remain challenging, while demand and margin for soya bean meal products are expected to improve with lower soya bean prices.

“Nevertheless, strong operating cash flow, coupled with reduced capital expenditure in the first half of the year, has allowed the group to maintain its interim dividend payout.”

Shares of Wilmar closed 2.66 per cent higher at $3.09 on Aug 14, after its results announcement.

THE BUSINESS TIMES