Wilmar Q2 profit up despite weaker revenue

A file picture of bottles of Arawana cooking oil, a brand of Wilmar, on a supermarket shelf. PHOTO: BLOOMBERG
A file picture of bottles of Arawana cooking oil, a brand of Wilmar, on a supermarket shelf. PHOTO: BLOOMBERG

SINGAPORE - Oil palm company Wilmar International reported improved earnings for the three-months to June 30, due to a stronger contribution from the oilseeds and grains business.

Net profit for the period was up 18.2 per cent year-on-year to US$201.8 million (S$278.1 million) for the period, while core net profit - excluding non-operating items - rose 18.8 per cent to US$193.6 million.

The higher profit came even as revenue for the period dropped 11.7 per cent year-on-year to US$9.28 billion.

"The higher net profit in the quarter reflected a strong performance from oilseeds and grains compared to last year. However, tropical oils turned in a lower profit due to lower crude palm oil prices while sugar saw weaker performances amidst tougher operating conditions," Wilmar said when announcing its latest results on Wednesday (August 5).

In the oilseeds and grains segment, which covers manufacturing and consumer products, pretax profit grew 179.3 per cent to US$115.9 million, "driven by improved crushing margins, higher volume crushed and continued robust performance in consumer products".

But the tropical oils segment posted a 15 per cent drop in pretax profit to US$176 million, while the pretax loss in the sugar segment widened 58.2 per cent to US$37.5 million.

Earnings per share for the quarter were 3.2 US cents, up 18.5 per cent, while net asset value dropped 0.74 per cent in 2014 year end to 240.5 US cents per share as at June 30. An interim dividend of 2.5 Singapore cents per share was proposed.

Wilmar's chief executive Kuok Khoon Hong is cautiously optimistic about the company's second half outlook.

"The group expects crushing margins in China to remain positive for the rest of the year and for consumer products to continue its strong performance… though plantation and palm oil mill performances will continue to be affected by the softer crude palm oil prices," he said.

whwong@sph.com.sg