Wilmar posts 3Q21 core net profit rose 15 percent, beating UOBKH forecast

Palm kernels at a plantation in IndonesiaPalm kernels at a plantation in Indonesia

Wilmar International reported Friday its third quarter core net profit increased 15 percent on-year to US$576.44 million, its record for the period and beating a forecast from UOB Kay Hian, on better performance in both the feed and industrial products, and plantation and sugar milling segments.

UOB Kay Hian had forecast third quarter core net profit would come in at US$450 million to US$480 million, which would have been an on-year decline.

Net profit for the third quarter increased 6 percent on-year to US$568.73 million, as it was impacted by non-operating losses from investment securities, Wilmar said in a filing to SGX.

Revenue for the July-to-September period grew 28.7 percent on-year to US$17.13 billion, the agri-business reported.

“Feed and industrial products performance was boosted by good manufacturing margins and stronger demand for downstream tropical oils products during the quarter. Soybean crushing margin was weak during the quarter but it was mitigated by reducing volume. Although soybean crushing margin recovered from its trough, it was still below its high in third quarter of 2020,” Wilmar said.

“Firmer palm oil and sugar prices in the third quarter of 2021 contributed to the good performance in plantation and sugar milling segment,” Wilmar added.

The food products segment continued to be hit by higher raw material costs due to a time lag in adjusting selling prices affecting overall margins, Wilmar said.

“Consumer products sales in China were lower due partly to recovery of food and beverage segment as the Covid-19 pandemic came under
control in China,” Wilmar said, but noted sales volume of medium pack and bulk products improved as the number of people dining out increased.

For the January-to-September period, Wilmar posted core net profit of US$1.31 billion, up 15.1 percent on-year, on revenue of US$46.67 billion, up 29.7 percent on-year.


Wilmar said that barring unforeseen circumstances, it expected results for the fourth quarter to be “satisfactory.”

“The feed and industrial products segment is expected to continue its good performance for the rest of the year as we foresee manufacturing margins for downstream tropical oils products to remain resilient. Soybeans crushing margin has improved and is expected to be positive for the rest of the year,” Wilmar said.

“Plantation and sugar milling business is also expected to benefit from firm palm oil and sugar prices. We expect food products segment to perform satisfactorily for the rest of the year,” Wilmar added.

Yihai Kerry Arawana Holdings

In a separate filing, Wilmar reported its 89.99 percent owned China subsidiary, Yihai Kerry Arawana Holdings, or YKA, posted third quarter net profit dropped 65.86 percent on-year to 710.79 million yuan, while revenue increased 12.21 percent on-year to 59.50 billion yuan.

YKA is listed on the Shenzhen Stock Exchange ChiNext Board.