Olam profits up 26% in first quarter

by World Grain Staff
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SINGAPORE — Olam International Limited reported on Nov. 14 in Profit After Tax and Minority Interest (PATMI) of S$43.2 million for the first quarter of 2013, a 26% increase compared to S$34.2 million in the same period a year ago.
Sales volume grew 97.7% to 3.7 million tonnes while sales revenue increased 45.2% to S$4.69 billion. 
The Food category accounted for 90.4% of total volumes and 80.2% of total revenue.
“Our long term strategy of building a well-balanced and diversified portfolio with a larger emphasis on food raw materials has served us well. Food raw materials, being relatively more recession-resistant, have shown their continued strong trajectory of growth and are expected to continue to underpin our future growth,” said Olam’s Group Chief Executive Officer Sunny Verghese. “The Non-food category, in particular the Industrial Raw Materials segment, is expected to show a recovery in margins in the second half of FY2013, when market demand improves.”
The Food Staples & Packaged Foods segment’s sales volume and net contributions rose 189.5% and 36.7% respectively in the quarter. Due to the significant increase in sales volume, net contributions per tonne fell to S$43 from S$90 a year ago.
This is mainly due to the changing product mix within the segment which saw a large increase in Grains origination volumes which inherently has a lower net contribution per tonne compared to the other product platforms in the segment. Rice also contributed to the strong volume growth. The Dairy and Sugar businesses continued to face difficult market and unfavourable trading conditions.
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