Wilmar H1 profit rises 2.6% on improved plantation, sugar milling and food product segments

Agribusiness Wilmar International on Tuesday (Aug 12) reported a net profit of US$594.9 million for the first half ended Jun 30, up 2.6 per cent from US$579.6 million in the year-ago period.

This was attributed to stronger performances in its plantation and sugar milling, which rose on the back of higher palm oil prices and fresh fruit bunch production. Wilmar’s food product segments also turned in a strong performance, due to improved sales in the flour and rice businesses in China.

Contributions from the company’s associations and joint ventures also more than doubled in H1, compared to a year ago. This was especially due to the group’s investments in Asia.

However, these improvements were partially offset by lower contributions from the feed and industrial products segment, said Wilmar.

Revenue was also up 6.3 per cent to US$32.9 billion, from US$30.9 billion, for the first half of the financial year on the back of higher revenue across most of the group’s business divisions.

Earnings per share was US$0.095 for the six months, up from US$0.093.

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The group declared an interim dividend of S$0.04 per share, a drop from S$0.06 per share. The dividend will be paid on Aug 28.

Kuok Khoon Hong, CEO of Wilmar said that the group’s first half results have improved despite “difficult operating conditions”.

“Refining margins for the tropical oils business are expected to remain challenged, while the plantations business should be favourable for the rest of the year. Our crushing operations are expected to remain stable,” said Kuok.

He added that Wilmar’s full-year results will depend on the resolution of various issues relating to its operations in Indonesia.

In June, the company was embroiled in Indonesian court proceedings involving a palm-oil graft case. In July, Indonesian authorities launched a probe into major rice producers, including Wilmar’s unit, over alleged mislabelling practices.

Said Kuok: “Barring unforeseen circumstances, we are cautiously optimistic that the performance of our core segments will be satisfactory.”

Shares of Wilmar closed flat at S$2.97 on Tuesday, before the announcement.