WILMAR International’s net profit for the third quarter ended Sep 30, 2024, fell 19 per cent to US$254.4 million, from US$313.9 million in the corresponding period a year ago.
Its core net profit – which excludes contributions from joint ventures and associates, as well as non-operating gains recognised from the group’s investment securities – declined more sharply, down 35.7 per cent year on year at US$208.1 million, from US$323.6 million.
While tropical oils, oleochemicals, shipping and crushing did better than expected, the group’s results were affected by weaker contributions from its China operations and sugar division, both of which had a strong quarter in Q3 2023, said the agribusiness group in a bourse filing on Wednesday (Oct 30).
Revenue was largely steady, edging up 0.4 per cent to US$17.7 billion in the latest quarter. This was due to lower commodity prices, even though sales volumes grew in both the food products as well as feed and industrial products segments.
Sales volume for the food products segment grew by 4.5 per cent to 8.7 million tonnes in Q3, while sales volume for the feed and industrial products segment rose 9.8 per cent to 18.2 million tonnes.
In its filing, Wilmar also provided an update on its performance for the first nine months of its 2024 financial year. In the year to date, it reported a net profit of US$834 million, down 3.6 per cent from S$864.8 million in the same period a year prior. Core net profit slid 9.6 per cent to US$814.4 million, from US$900.9 million previously.
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Revenue for the nine months also fell, down 3 per cent at US$48.7 billion, against US$50.2 billion in the preceding year.
Wilmar noted that the continued softening of most commodity prices led to lower working capital requirements, thus reducing its net debt to US$16.6 billion as at Sep 30, down from US$17.7 billion as at Dec 31, 2023.
This consequently improved the group’s net gearing ratio to 0.81 times as at Sep 30 this year, from 0.88 times in FY2023.
The agribusiness group also highlighted that it generated “stable” cash flows from operating activities of US$3.1 billion in the nine-month period – though this was down 32 per cent from the first nine months of 2023 – with free cash flow amounting to USS$1.8 billion.
At the end of the reporting period, the group also had unutilised banking facilities amounting to US$35.3 billion.
“The group achieved a reasonable set of results despite the challenging operating environment across most of our businesses during Q3 2024,” Wilmar said. “With the forecasted improvements in palm production, refining margins for tropical oils are expected to improve whilst crushing margins for soybean are expected to remain positive.”
It remains “cautiously optimistic” that its performance for the remainder of 2024 will be “satisfactory”.
The counter closed at S$3.20, down S$0.02 or 0.6 per cent, on Wednesday before the announcement.
