Olam reports 2021 net profit more than doubled

Hands holding dried cocoa beans before they are crushed in an Ivory Coast village. Photo by Etty Fidele on UnsplashHands holding dried cocoa beans before they are crushed in an Ivory Coast village. Photo by Etty Fidele on Unsplash

Olam International reported Monday its 2021 net profit climbed 179 percent on-year to S$686.43 million on higher prices across most products and commodities, and significantly lower exceptional losses.

Sales of goods and services for the 12 months ended 31 December increased 31.2 percent on-year to S$47.0 billion, the agri-business said in a filing to SGX. 

Olam Agri contributed 66.5 percent of group revenue, Olam Food Ingredients (OFI) contributed 31.1 percent and Olam International Ltd. (OIL) was at 2.4 percent, the filing said. The OFI business includes cocoa, coffee, nuts, spices and dairy, with clients including Hershey, Nestle, Aldi, Costco and Starbucks.

Operational profit after tax and minority interests (PATMI), which excludes exceptional items, increased 41.8 percent on-year in 2021 to S$961.1 million, a record, Olam said. 

Olam proposed a final dividend of 4.5 Singapore cents a share, for a total dividend for the year of 8.5 Singapore cents a share, compared with 7.5 Singapore cents in 2020.

Outlook

Olam said it expected to list OFI in both London and Singapore in the second quarter. 

“We are concurrently exploring various strategic options to unlock value and accelerate growth for Olam Agri – these include the potential introduction of strong strategic minority partners who share our vision for the business, and/or a potential IPO and demerger of Olam Agri,” Sunny Verghese, Olam co-founder and group CEO, said in the statement.

He added: “We continue to be optimistic regarding the prospects for all three operating groups as they are right at the centre of key global food and consumer trends, which for ofi include the growing demand for more plant-based, on-trend, natural, healthy and sustainably sourced food ingredients, for Olam Agri the growing demand for food, feed and fibre from a growing population, the transition of dietary habits from cereals to more protein-based diets and growing concern for food security, and for OIL the growing market opportunities for digital and sustainability solutions to transform the food and agri-business sector.”

Olam added that it is monitoring the situation in the Black Sea region, particularly the safety of people in Ukraine. But the company noted the overall region isn’t a material contributor to revenue and assets.

Read more details on Olam’s earnings and an update on the reorganisation.