Wilmar sees 1Q earnings jump 49% to US$241.2m

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SINGAPORE: Agribusiness group Wilmar International Ltd saw its first-quarter earnings jump 49.1% to US$241.2 million (RM876 million) from US$161.8 million a year ago due to strong earnings at its oilseeds and grains business.

The group’s core net profit (excluding non-operating items) grew 22.7% to US$263.32 million in the first quarter ended March 31, 2015 (1QFY15) compared with US$214.57 million in 1QFY14.

Revenue in 1QFY15, however, fell 8.3% to US$9.41 billion from US$10.27 billion a year earlier due to lower commodity prices.

In its Singapore Exchange filing, Wilmar (fundamental: 0.8; valuation: 1.4) said the higher net profit in 1QFY15 was led by its strong performance from oilseeds and grains (manufacturing and consumer products) as well as higher contributions from associates.

However, tropical oils (plantation and manufacturing) and sugar (merchandising, manufacturing and consumer products) saw weaker performances in 1QFY15, amid tougher operating conditions in their respective markets.

As at March 31, 2015, total assets stood at US$42.77 billion while shareholders’ funds were US$15.47 billion. Net gearing ratio improved to 0.73 times from 0.78 times in Dec 31, 2014.

Commenting on its prospects, Wilmar chairman and chief executive officer Kuok Khoon Hong said crush margins are expected to remain positive going into mid-2015 while consumer products will continue to grow globally with reasonable margins.

“Although operating conditions for tropical oils will remain challenging, we believe we will be able to overcome the current difficult environment, especially if the Indonesian government implements its proposed support policy for biodiesel. Overall, we are cautiously optimistic that second-quarter performance will be satisfactory,” he added.

Meanwhile, the improved profit from its 18.3% associate Wilmar will give a boost to PPB Group Bhd’s earnings.

Wilmar closed two Singapore cents higher at S$3.19 (RM8.62) yesterday, bringing a market capitalisation of S$20.4 billion.

 

This article first appeared in The Edge Financial Daily, on May 8, 2015.