SINGAPORE (Nov 13): Olam International reported earnings of $20.4 million for 3Q19 ended September, a marginal 1.5% decline from earnings of $20.7 million a year ago. 

The weaker bottomline was a result of a higher cost of goods sold, as well as higher net finance costs, depreciation and exceptional losses. 

This translates into earnings per share of 0.2 cents for the quarter, unchanged from 3Q18. 

Revenue for the quarter slid by a marginal 0.2% to $8.31 million from $8.29 million in 3Q18, while cost of goods sold saw an increase of 10.5% to $22.1 billion from $20.0 billion in the preceding year.

EBITDA for the quarter saw an increase of 25.2% to $286.9 million from $229.1 million, which the group attributed primarily to higher contributions from all segments in the food category including edible nuts and spices, confectionary and beverage ingredients as well as food staples and packaged foods. 

Depreciation and amortisation costs for the quarter rose 25.9% to $128.5 million, while finance costs saw an increase of 15.3% to $165.4 million. 

As at end September, cash and cash equivalents stood at $2.6 billion. 

Net gearing as at end September stood at 1.37 times on the back of lower net debt arising from the reduction in working capital. 

In its outlook statement, Olam noted that its diversified and well-balanced portfolio provides a resilient platform to navigate the challenges in both the global economy and commodity markets. 

The group added that it is continually reviewing options for divesting and/or restructuring various assets and businesses in line with its strategic plan, some of which may be concluded in the current financial year. 

Anantharaman Shekhar, executive director of Olam, says, “Our disciplined efforts in proactively managing our capital structure position us well for the rest of 2019 as we approach the peak procurement season for several of our leading commodities and for high-growth strategic investments.”

Shares in Olam International closed 2 cents higher, or 1.1% up, at $1.84 on Wednesday prior to the release of results.