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SINGAPORE (Nov 14): Olam International has posted 3Q earnings down 8.6% to $20.5 million in 3Q16, compared to $22.5 million in the same quarter last year.
In a filing to SGX on Monday, Olam says this was largely due to higher depreciation and amortisation charges in the quarter, which increased 43.5% to a loss of $82.6 million in 3Q16 compared to a loss of $57.5 million in 3Q last year.
Excluding exceptional items, operational Profit After Tax and Minority Interest (PATMI) in the quarter ended Sept fell 20.2% to $20.5 million, from $25.7 million in 3Q15.
However, Olam’s operating profit improved, with Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) increasing by 7.7% to $205.5 million in 3Q16, compared to $190.9 million in the same period last year.
This was mainly due to strong performance from Olam’s Confectionery & Beverage Ingredients and Food Staples & Packaged Foods, which offset declines in other business segments.
Revenue increased 6% to $4.74 billion in 3Q16, compared to $4.47 billion in the same quarter last year.
This was mainly due to lower prices for some commodities, which offset a 16.4% increase in overall sales volumes.
Cash and cash equivalents stood at $2.05 billion as at Sept 30, 2016.
“Our differentiated strategy has enabled us to deliver improved performance year-to-date under challenging conditions,” says Olam Co-Founder and Group CEO Sunny Verghese. “We continue to explore selective opportunities in our prioritised platforms, while remaining focused on ensuring the performance of our gestating assets.”
Olam Executive Director and Group COO A. Shekhar adds that the company had taken “several steps during the quarter to further strengthen its balance sheet”. These include “a benchmark perpetual bond issuance, tap of our senior bonds and refinancing of our syndicated loans,” he says.
Looking ahead, Olam says the long-term trends in the agri-commodity sector remain attractive, and that the company is well positioned to benefit from this.
Olam International closed 1 cent higher at $2.10 on Friday.