Wilmar reports 1Q19 net profit rose 26 percent on tropical oils, sugar

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Wilmar reported Friday its first quarter net profit rose 26.4 percent on-year to US$257 million on better results from the tropical oils, sugar and consumer products segments.

“These improvements were partially offset by weaker performance in the group’s crushing business as well as lower contributions from associates in Africa and China,” Wilmar said.

Core net profit for the quarter rose 36.4 percent on-year to US$250.3 million, the agri-business company said.

UOB KayHian had forecast core net profit of US$190 million to US$210 million.

Revenue for the quarter ended 31 March fell 6.2 percent on-year to US$10.44 billion on lower commodity prices, despite overall sales volume rising 5 percent during the quarter, the company said in a filing to SGX.

“The group reported a reasonably good set of results in the first quarter of 2019, given the tough operating environment. The improved
performance by both Tropical Oils and Consumer Products businesses since the second quarter of 2018 has been encouraging,” Kuok Khoon Hong, chairman and CEO of Wilmar, said in the statement.

“With the exception of sugar milling and palm plantation, most of our businesses are doing reasonably well. Further, crushing margins are also expected to improve in the second quarter of 2019,” Kuok said. “We are cautiously optimistic that performance for the rest of the year will be satisfactory.”

Tropical oils pretax profit jumps

The tropical oils segment posted an 81 percent increase in pretax profit to US$183.8 million on stronger performance from the manufacturing and merchandising businesses on better sales volume and margins. That was partly offset by lower crude palm oil prices and production yields, which dented the plantation segment, it said.

The oilseeds and grains segment reported pretax profit for the first quarter dropped to US$91.1 million from US$172.6 million in the year-ago quarter, despite stronger contributions from the consumer products, rice and flour million businesses.

“These helped offset the weaker results from the crushing business, which had been impacted by the African swine fever outbreak in China and a sharp drop in Brazilian soybean basis,” Wilmar said. “Nonetheless, the negative impact was mitigated by reduced crushing activities and good management of the group’s soybean position.”

Sugar segment swings to profit

The sugar segment posted a pretax profit of US$1.7 million, swinging from a loss of US$39 million in the year-ago quarter, on a better performance from the refining and merchandising activities.

The share of results of joint ventures and associates dropped 50 percent on-year to US$20.9 million for the quarter as stronger performances in the Europe and Vietnam investments were offset by lower contributions from the African associates and investments in China, Wilmar said.


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