Olam reports 14% lower 3Q earnings on coffee, peanuts and commodity financial services

Olam reports 14% lower 3Q earnings on coffee, peanuts and commodity financial services

PC Lee
14/11/18, 07:36 am

SINGAPORE (Nov 14): Olam reported 3Q18 earnings of $20.7 million, down 14.2% from a year ago against a strong 3Q17, mainly due to lower contribution from coffee, peanuts and Commodity Financial Services (CFS). This brings 9M18 earnings to $272.6 million, down 13.6% y-o-y.

Revenue for 3Q18 rose 23.6% to $8.3 billion on the back of a 66.4% increase in volume traded to 9.7 billion MT. As a result, revenue for 9M18 came in 15.7% higher at $22 billion on the back of a 57.8% rise in volume to 23.3 billion MT.

9M18 EBITDA for Edible Nuts, Spices & Vegetable Ingredients (SVI) fell by 18.3% to $277.0 million, impacted by the peanut businesses in Argentina and the US, which offset the improved performance by SVI, excluding tomato processing.

9M18 EBITDA for Confectionery & Beverage Ingredients improved 12.1% to $278.9 million as strong performance in the cocoa supply chain and processing compensated for weaker results from coffee, which continued to face difficult market conditions.

9M18 EBITDA for Food Staples & Packaged Foods declined 14.6% to $248.7 on lower contribution from Edible Oils, Sugar and Dairy, which offset the improved results from Grains and Packaged Foods.

9M18 EBITDA for Industrial Raw Materials, Agricultural Logistics & Infrastructure fell 4.8% to $132.4 million on relatively lower contribution from cotton, which offset growth from GSEZ, wood products and rubber.

CFS reported higher 9M18 losses of $31.9 million mainly due to losses from the funds business.

While global markets are experiencing heightened 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 will continue to execute on its 2016-2018 Strategic Plan for the rest of 2018 and focus on growing its prioritised platforms, turning around underperforming businesses, ensuring gestating businesses reach full potential and delivering positive free cash flow,” says the group in its filing.

Year to date, shares of Olam are down 13.2% to close at $1.77 on Tuesday before the results announcement.

US sanctions on Huawei could backfire

SINGAPORE (May 27): It was only to have been expected. After nearly a year of pressure that failed to stop Huawei Technologies Co’s expansion -- especially in the rollout of the next generation 5G wireless network globally -- in its tracks, US President Donald Trump signed an executive order effectively barring American firms from doing business with the Chinese telecommunications equipment company. The inclusion of Huawei on the US Department of Commerce’s Bureau of Industry and Security’s (BIS) Entity List means that companies would need to apply for a waiver to supply goods with 25....

Annica chairman Ong quits just as $33 mil goes missing at his law firm JLC

SINGAPORE (May 27): Jeffrey Ong, managing partner of law firm JLC Advisors, may have given instructions to pay out a sum of $33.2 million held in escrow by his firm for a client, Allied Technologies. According to Allied’s statement filed with Singapore Exchange on May 23, the payment may have been “unauthorised”, citing a letter it received from JLC on May 22. Allied’s statement did not specify who the payment was made to. Ong also abruptly resigned as non-executive chairman of Annica Holdings on May 20. In a May 22 filing with SGX, Annica CEO Sandra Liz Hon Ai Ling said Ong resigne....

SGX RegCo sees targeted approach in enforcement, more powerful market discipline

SINGAPORE (May 27): Tan Boon Gin, CEO of stock exchange regulator Singapore Exchange Regulation, says the market can expect a stronger regulatory presence. “You will see a series of enforcement cases coming up quite soon,” he tells The Edge Singapore. Tan’s assertion comes amid significant changes in the market as sentiment remains lacklustre and investors’ expectations change. The local stock market has gone through significant upheaval, not least because of the penny stock crash in 2013 that wiped out some $8 billion in value from the market. The event dented investor sentiment, a....