Wilmar earnings rise on higher crush margins

15.05.2017

Wilmar International Ltd.’s net profit in the first quarter ended March 31 was $361.6 million, equal to 5.7¢ per share on the common stock, up 51% from $239.4 million, or 3.8¢ per share, in the same quarter as last year.

Revenue for the quarter was $10.570 billion, up 17.4% compared to $9.002 billion in the first quarter of 2016.

“The group has shown strong results in the first quarter, particularly from our Tropical Oils and Oilseeds & Grains segments,” said Kuok Khoon Hong, Wilmar’s chairman and chief executive officer, when results were announced on May 11.  “We expect our Flour business to continue its growth, while volume for Consumer Products is expected to recover from the seasonal reduction in first quarter of 2017. Although lower CPO prices will impact our Plantation and Palm Oil Mills operations, we believe that this will be partially offset by anticipated higher palm oil production. Overall, we are cautiously optimistic that the next quarter’s performance will be satisfactory.”

The company attributes its overall strong results to the good performance from its Oilseeds & Grains and Tropical Oils as well as higher contributions from the Group’s associates.

Oilseeds & Grains continue to perform positively from the second half of 2016 and posted a 27% increase in pretax profit to $213.7 million, which compared to $168.8 million to the first quarter of 2016.

“The strong result was achieved on the back of higher soybean volume crushed and stable crushing margins,” Wilmar said. “This was partially offset by weaker seasonal sales volume from the Consumer Products business, which was affected by the early Chinese Spring Festival in 2017.”

Overall sales volume for the Oilseeds & Grains unit slightly declined 0.1 million tonnes, to 7.1 million tonnes.

Wilmar also announced the possibility of an internal restructuring of its China operations with the possibility of a separate listing.

“As the proposed listing is still at evaluation stage, shareholders are advised to exercise caution in trading their shares,” Khoon Hong said. “There is no certainty or assurance as at the date of this announcement that the listing proposal will be carried out.”


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