AGRIBUSINESS Wilmar International posted a 39.4 per cent fall in net profit to US$590.2 million for the six months ended December 2024.
The decline was due to the absence of a US$231 million gain in the year-ago period – from the disposal of its Moroccan associate Cosumar – as well as a US$22.8 million net loss from a share swap exercise involving its China associates and joint venture Luhua.
Another factor was the “weaker” sugar merchandising business, said Wilmar chairman and chief executive Kuok Khoon Hong in a statement on Thursday (Feb 20).
The company’s core net profit – which excludes contributions from joint ventures and associates, as well as non-operating gains from investment securities – was down 43.6 per cent at US$558.2 million.
The company proposed a final dividend per share of S$0.10, down slightly from S$0.11 the year before.
The lower earnings came even as revenue for the half-year rose 5.3 per cent to US$36.4 billion on stronger sales volumes. Such turnover grew 8 per cent in the food products business, and 15 per cent in the feed and industrial products segment.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
That said, Wilmar noted that growth was “partially offset” by losses in its new food product ventures. Although these are “not profitable yet, the group believes they will strengthen the long-term potential of its food products segment”, it added.
The feed and industrial products business was also hit by weaker sugar merchandising activities and challenging conditions in the tropical oils business. The segment’s H2 profit fell to US$295.4 million, from US$527.7 million in the year-ago period.
In the plantation and sugar milling segment, challenges included lower sugar prices and a 13 per cent decline in H2 sugar sales volume. Unfavourable weather also led to a 9 per cent decrease in the production of fresh fruit bunches at palm plantations.
Nevertheless, higher palm oil prices lifted performance. The plantation and sugar milling segment recorded a 4 per cent rise in H2 pre-tax profit to US$215.3 million, excluding the US$231 million gain from the disposal of Cosumar.
For the full year, Wilmar’s revenue inched up 0.3 per cent to US$67.4 billion. Net profit fell 23.3 per cent to US$1.2 billion, while core net profit was down 25.7 per cent at US$1.2 billion.
Looking ahead, Kuok expects the company to increase its market share in the food products segment, with a focus on “quality and healthy food”.
While he expects palm oil refining to remain challenging, he is “cautiously optimistic that the oilseeds business will perform satisfactorily”.
This is because a record soybean crop production is expected in Brazil this year.
Wilmar shares ended Thursday at S$3.21, up 0.9 per cent.
