For the 2Q20 ended June, Wilmar International recorded earnings of US$386.6 million ($530.8 million), 156.2% higher than the US$150.9 million a year ago.

Correspondingly, the group registered earnings of US$610.9 million for 1H20, up 49.8% from the US$407.9 million in 1H19.

The higher earnings came about on the back of improved contributions across all of the group’s core segments, particularly the feed and industrial products segment, which recorded a 104.9% y-o-y surge in profit to US$370.8 million for 1H20.

In the same half-year period, Wilmar also saw stronger demand for consumer products due to the lockdown measures that led to people eating at home more often. Higher palm oil prices for the period also contributed to the higher earnings.

Better oil palm plantation performance on the back of high palm oil prices.

The higher earnings for 1H20 translates to a 50% increase in its earnings per share (EPS) to 9.6 US cents from the 6.4 US cents a year ago.

Revenue for 1H20 grew 12.0% y-o-y to US$22.7 billion driven by improved demand across all segments, increased sales in consumer products, as well as the consolidation of Goodman Fielders’ results in the current period.

Cost of sales for the period increased by 9.9% y-o-y to US$20.1 billion due to higher overall volume in the medium pack and bulk businesses and lower volume from lower demand from the hotel/restaurant/catering (HORECA) businesses.

Finance costs fell 16.6% y-o-y to US$400.6 million due to the declining global interest rate environment.

Segmentally, food products (consumer products, medium pack and bulk) saw a 21% y-o-y increase to US$495.1 million for 1H20 due to strong demand. This was partially offset by the lower sales in the HORECA business, which was weaker due to the lockdowns in the group’s major markets.

Feed and industrial products (tropical oils, oilseed & grains and sugar) registered a 105% y-o-y surge in pre-tax profit to US$370.8 million for 1H20 due to a “strong recovery” in oilseeds & grains due to recovering demand in China following the African swine fever outbreak.

Plantation and sugar milling recorded a lower pre-tax loss of US$82.9 million in the same period mainly due to lower sugar prices in early 1H20. This was mitigated by better performance from the palm oil planation business due to better palm oil prices.

The others segment saw a pre-tax loss of US$41.2 million in 1H20 mainly from mark-to-market losses from Wilmar’s investment portfolio.

Joint ventures and associates doubled their contributions from US$42.8 million to US$84.1 million for the half-year period due to strong performance from the group’s investments in China, India and Africa.

The board has thus declared an interim dividend of 4 cents per share, which will be payable on Aug 27.

As at June 30, cash and cash equivalents stood at US$2.19 billion, higher than the US$1.80 billion posted the year before.

“We have been fortunate that our operations have not been significantly impacted as the Group’s business is predominantly in the production and distribution of essential food products. Further, China, the country where the Group has the largest operations, has recovered from this pandemic earlier than most countries,” says Kuok Khoon Hong, chairman and CEO of Wilmar.

“We are also aided by having many integrated manufacturing complexes in our major markets which helped to ensure continuous supply of our products during the lockdowns,” he adds.

On Aug 6, Wilmar announced that it is one step closer to its China IPO through its 99.99%-owned subsidiary Yihai Kerry Arawana Holdings.

Shares in Wilmar International closed 11 cents lower, or 2.3% down, at $4.69 on Aug 11.