SINGAPORE (May 14): Agri-business group Olam International, which grows, trades and processes food and industrial raw materials, reported a 9.8% rise in 1Q18 earnings to $158 million from $143.8 million a year ago on reduced net finance costs and lower taxation.
Sales of goods and services rose 8.5% to $6.3 billion from $5.8 billion a year ago while other income more than doubled to $30 million and finance income more than trebled to $22.3 million.
Share of results from jointly controlled entities and associates more than quadrupled to $12.3 million.
Other expenses increased 58.2% to $332.6 million while finance costs narrowed 25.1% to $109.7 million.
Revenue from Edible Nuts, Spices & Vegetable Ingredients fell 4% at $874.5 million, mainly on reduced volumes in peanuts while EBITDA fell 1.6% to $135.8 million compared with a strong set of results for 1Q17.
Revenue from Confectionery & Beverage Ingredients decreased 10.5% to $1.9 billion on lower volumes and lower prices. EBITDA declined 18.4% to $61.2 million due to significantly lower contribution from coffee in 1Q18.
Revenue from Food Staples & Packaged Foods increased 34% to $2.6 billion, mainly on higher trading volumes in Grains but EBITDA declined 15.1% to $100.4 million when compared with a very strong 1Q17.
Revenue from Industrial Raw Materials, Ag Logistics & Infrastructure rose 9.1% to $903.4 million on higher cotton volumes and prices while EBITDA improved 6.4% to $66.2 million on higher contribution from Cotton and Gabon Special Economic Zone.
Operational PATMI, which excludes exceptional items, grew 13% to $162.6 million from a year ago.
Net gearing as at March 31 was lower at 1.49 times compared to 1.98 times as at March 31 due to lower net debt from the reduction in working capital, lower gross capital expenditure, divestments and the conversion of warrants into equity.
While global markets continue to experience political and economic uncertainties, Olam believes its diversified and well-balanced portfolio provides a resilient platform to navigate the challenges in both the global economy and commodity markets.
Olam says it will also continue to focus on turning around underperforming businesses.
Shares in Olam closed 1 cent higher at $2.30 on Friday.