AGRIBUSINESS giant Olam Group on Friday (Feb 28) reported a net profit of S$38.4 million for the second half ended Dec 31, down 83.4 per cent from S$230.8 million in the previous corresponding period.
This translated to earnings per share of S$0.0058 for the half-year period, down from S$0.0567 the previous year.
The group noted that earnings declined as earnings before interest and tax (Ebit) growth was offset by “a significant increase in net finance costs and higher net exceptional losses”.
These losses were mainly from the temporary cessation of operations at its food ingredients unit ofi’s onion and parsley processing plant, as well as the lease surrender and exit of two non-strategic almond orchards in the US.
Excluding these exceptional items, underlying profit fell 47.9 per cent on the year to S$142.8 million.
Revenue for the period, however, rose 24 per cent to S$29.2 billion from S$23.6 billion.
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Sales volume for H2 grew 11.2 per cent and Ebit was up 10 per cent at S$1 billion, led by strong growth from the group’s ofi and Olam Agri units, which offset higher losses from the remaining Olam group.
Olam’s board proposed a final dividend of S$0.03 per share, down from S$0.04 per share the prior year. This takes the full-year dividend to S$0.06 per share, down from S$0.07 per share the year before. The dividend will be paid on May 14, following the record date of May 6.
For the full year, net profit declined 69 per cent to S$86.4 million from S$278.7 million. This was because Ebit growth was offset by the significant increase of S$445.7 million in net finance costs, which was driven by elevated net debt levels from price-led working capital increases.
Revenue, however, climbed 16.3 per cent to S$56.2 billion from S$48.3 billion, due to high revenue growth from ofi, on the back of input price increases.
Shares of Olam closed 4.6 per cent or S$0.05 lower at S$1.04 on Thursday.
