SINGAPORE (Aug 14): Shares in Wilmar International are up 12 cents at $3.25 at 10.30am with 6 million units traded after the agribusiness group announced 2Q18 earnings surged more than five times to US$316.4 million ($435.3 million) from a year ago.
Revenue for 2Q18 ended June increased 2% to US$10.80 billion from a year ago due to higher sales volume and commodity prices from the Oilseeds & Grains businesses.
Core net profit of US$352 million was up more nearly 10 times driven by stronger performance from the Oilseeds & Grains and Tropical Oils segments, as well as enhanced contributions from the group’s associates.
Tropical Oils reported a 165% increase in pretax profit to US$154.9 million in 2Q18 due to better performances from the midstream and downstream businesses.
Oilseeds & Grains registered a more than fourfold increase in pretax profit to US$290.2 million in 2Q18, benefiting from higher volume and good crush margins and a good performance from the Consumer Products business.
Sugar also reported a smaller pretax loss of US$46.2 million in 2Q18 due to better performance by the group’s merchandising and processing operations.
Joint Ventures & Associates recorded positive contributions of US$49.6 million, mainly from the group’s associates in China and Europe.
Wilmar’s board has proposed an interim tax exempt (one-tier) dividend for 1H18 of $0.035 per share, a 17% increase from the 1H2017 dividend.
Kuok Khoon Hong, Chairman and CEO, says, “The trade tensions between the US and China improved crush margins in the short term, thus benefitting our oilseeds crushing business. However, a prolonged dispute between the two countries will have a negative impact on crush margins due to lower plant utilisation.
“Nevertheless, we expect our other businesses such as consumer products, rice and flour milling to perform reasonably well in the coming quarters. While sustained low palm oil prices will affect our plantation business, our downstream businesses will benefit from increased demand and better margins for its products. Sugar performance should also improve in the second half of the year, with the commencement of crushing season in June.
“Overall, we are cautiously optimistic that performance for the rest of the year will be satisfactory.”
