SINGAPORE (Aug 14): Olam International says 2Q18 earnings dropped by 36.4% to $93.9 million, compared to $147.7 million in 2Q17.

The weaker bottomline was due to a downcycle in the coffee industry, bad weather conditions in peanut farming in Argentina and lower contribution from edible oils.

The results bring 1H18 earnings to $251.9 million, 13.6% lower than $291.5 million in 1H17.

During the quarter, the group’s sale of goods & services increased by 13.9% to $7.43 billion from $6.52 billion a year ago.

Cost of goods sold also increased by 14.5% y-o-y to $6.66 billion.

Other income was 23.8% lower at $8.47 million from $11.1 million last year.

Finance income increased by 47.4% to $21.5 million compared to $14.6 million in the previous year.

As at June 30, the group’s cash and cash equivalents stood at $2.35 billion.

The group has declared an interim dividend of 3.5 cents, which will be payable on Aug 31.

Sunny Verghese, co-founder and group CEO, says, “While our first half results were lower than the previous corresponding period, we expect stronger prospects for our business for the rest of the year. Our investments in improving operational excellence (stronger cash, cost and capital focus), launch of AtSource, and digitalisation initiatives have progressed well and will strengthen our business going forward.”

AtSource is a sustainable and traceable sourcing solution that will provide unrivalled environmental and social insights into the journey of agricultural raw materials and food ingredients from the farm to manufacturing and retail customers.

A.Shekhar, executive director and group COO, adds, “We continue to take proactive action to strengthen our balance sheet. We have significantly reduced net debt, lowered finance costs and diversified our funding sources with initiatives including undertaking Asia’ first sustainability-linked club loan and issuing private placements.”

Shares in Olam last traded 2 cents lower at $2.20 on Monday.