SINGAPORE: Food boosts Olam Q1 profits
By Katy Askew | 15 November 2012
- Q1 net profit up 26.2%
- Sales rise 45.2%
- Food sales gain 114.7%
Olam profits jump on food unit
Olam International has booked a 26.2% increase in first-quarter profits, boosted by growth at its food business.
Net profit for the three months to the end of September rose to S$43.2m (US$35.3m), up from S$34.2m in the comparable period of last year.
Revenues gained 45.2% to S$4.7bn. The rise was driven by sales from Olam's food unit more than doubling, while industrial raw material sales were up 13.1%.
Looking to the coming year, Olam said it is "positive about the long-term fundamentals" of its business. However the company also sounded a note of caution on the outlook for the next nine months. "The cyclical events experienced over the past year combined with the continuing volatility and uncertainty in the global markets could have some residual impact on the results in FY2013," the company warned.
OLAM INTERNATIONAL REPORTS S$43.2M IN PROFIT AFTER TAX AND MINORITY
INTEREST FOR Q1 FY2013
Q1 FY2013 : Financial Highlights
Sales Volume of 3.7 million tonnes, up 97.7%
Sales Revenue of S$4.69 billion, up 45.2%
Net Contribution (NC) of S$311.5 million, up 23.6%, with NC/tonne at S$85
Profit After Tax and Minority Interest (PATMI) at S$ 43.2 million, a growth of 26.2%
Food category Sales Volume up 114.7%, NC up 24.2%
Q1 FY2013 Q1 FY2012 Change
Sales Volume (metric tonnes) 3,680,567 1,862,075 97.7%
Sales Revenue (S$ billion) 4.7 3.2 45.2%
NC (S$ million) 311.5 251.9 23.6%
PAT (S$ million) 41.8 33.3 25.5%
PATMI (S$ million) 43.2 34.2 26.2%
EPS (cents/share) 1.6* 1.4* 14.4%
Consolidated Financial Results Ended Sep 30
* Based on weighted average number of shares of 2,390,213,869 for Q1 FY2013 (compared to weighted average
number of shares of 2,442,234,869 for Q1 FY2012)
Singapore, November 14, 2012 – Olam International Limited (“Olam” or “the Group”), a leading global, integrated supply chain manager and processor of agricultural products and foodingredients, today reported Profit After Tax and Minority Interest (PATMI) of S$43.2 million for Q1 FY2013 compared to S$34.2 million in Q1 FY2012.
Sales Volume grew 97.7% to 3.7 million metric tons while Sales Revenue increased 45.2% to S$4.69 billion. Overall NC grew 23.6% to S$311.5 million. While Sales Volume rose, NC per tonne was lower at S$85 compared to S$135 in Q1 FY2012, impacted primarily by the significant growth in the Grains business which has inherently lower NC margins within the Food Staples & Packaged Foods segment.
The Food category accounted for 90.4% of total volumes, 80.2% of total revenue and 89.4% of total NC. Sales Volume increased by 114.7% and NC increased by 24.2% compared to Q1 FY2012. Sales Volume for the Non-food category improved by 13.1% and NC increased by 19.4% led by a turnaround in the Commodity Financial Services segment.
Olam’s Executive Director of Finance and Business Development, A Shekhar explained the results: “Olam continues to deliver overall earnings growth amidst a still sluggish recovery in market conditions especially within the Industrial Raw Materials segment. This has been a result of our uniquely shaped portfolio that is well-balanced and diversified across 16 product platforms and 65 countries with no platform or country dominating our revenues, earnings or investments.”
Olam’s Group CEO, Sunny Verghese concurred: “Our long term strategy of building a wellbalanced and diversified portfolio with a larger emphasis on food raw materials has served us well. Food raw materials, being relatively more recession-resistant, have shown their continued strong trajectory of growth and are expected to continue to underpin our future growth. The Non-food category, in particular the Industrial Raw Materials segment, is expected to show a recovery in margins in the second half of FY2013, when market demand improves.”
Original source: Olam International