SINGAPORE: Food resilient as Olam's FY profits fall
- Cotton, wood products woes hit Olam profits
- Food remains resilient
- Volumes and margins from food up
Olam said food arm was "relatively recession resistant"
Singapore conglomerate Olam International has posted a fall in annual profits but sales volumes and margins from its food business continued to grow.
The company yesterday (28 August) booked a 4.6% decline in underlying net profit to S$355.5m (US$283.6m) for the year to the end of June. Olam suffered from volatility in the cotton sector and slowing demand for its wood products in China.
However, it said its food business reported "strong volume and margin growth" during the year.
Olam's food business, which accounts for the bulk of its sales and profits, is made up of three operations - edible nuts, spices and beans; confectionery and beverage ingredients; and food staples and packaged foods.
Food volumes increased 31.5%, Olam said, helping the company to report a 12.7% gain in revenue to S$17.1bn.
In June, Olam expanded its packaged food business in Africa with the acquisition of Nigerian dairy group Kayass. Click here for our BRICs and beyond column on the deal and Olam's plans to increase its food production in the country.
OLAM INTERNATIONAL REPORTS S$403.8M IN PROFIT AFTER TAX (PAT) AND S$370.9M IN PROFIT AFTER TAX AND MINORITY INTEREST (PATMI) FOR FY2012
- Excluding exceptional items#, FY2012 PATMI declined 4.6% from particularly strong results in the prior year;
- Food category continues to report strong volume and margin growth; overall results impacted by the Industrial Raw Materials segment due to outlier events in the cotton market;
- Board of Directors recommends final dividend of 4.0 cents per share for FY2012.
FY2012: Financial Highlights
Sales Volume of 10.7 million tons, up 26.3%
Sales Revenue of S$17.09 billion, up 8.2%
Net Contribution (NC) of S$1,381.8 million, up 13.0%, with NC/ton at S$129
PATMI excluding exceptional items#, at S$355.5 million, a decline of 4.6%
Food category Sales Volume up 31.5%, NC up 31.6%
Net Asset Value^ per share up from S$1.15 in FY2011 to S$1.45 in FY2012
Improved liquidity position, with adjusted net gearing of 0.37x in FY2012 from 0.54x in FY2011
Strengthened balance sheet, with equity^ increase from S$2,568.1 million in FY2011 to S$3,530.8 million in FY2012.
Click here for the release from Olam.
Original source: Olam International
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