Oilseeds, grains push Wilmar earnings higher

by Holly Demaree-Saddler
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SINGAPORE — Wilmar International Ltd.’s net profit in the 2017 year ended Dec. 31, 2017, was $1.2 billion, equal to 19.3¢ per share on the common stock, up 25% from $972.2 million, or 15.4¢ per share, in the same period as last year.

 

Revenue for the year was $43.84 billion, up 5.9% compared with $41.401 billion in 2016.

Wilmar CEO and president Kuok Khoon Hong
Kuok Khoon Hong, chairman and CEO of Wilmar

“Our portfolio of high quality agribusiness enabled the group to do well in 2017,” said Kuok Khoon Hong, chairman and chief executive officer (CEO) of Wilmar. “Looking ahead, we expect our integrated business model to continue to achieve sustained growth. Barring unforeseen circumstances, performance in 2018 is expected to be satisfactory.”

The company noted good performance in Oilseeds & Grains, and strong contributions from Joint Ventures & Associates, especially those in China, India and Africa, were offset by weaker results in the Tropical Oils and Sugar businesses. Excluding the gains from the group’s investment portfolio, core net profit was lower for the quarter.

The Oilseeds & Grains segment tripled its pre-tax profit in 2017 to $735 million, which compared with $251.1 million in 2016.

The strong performance for Oilseeds & Grains was driven by good crush margins and strong sales in manufacturing. Wilmar said the improvement was partially offset by the effect of the early Chinese Spring Festival in 2017, which shifted seasonal demand for consumer products to fourth quarter of 2016, resulting in marginally lower consumer products sales in the fourth quarter of 2017 and fiscal year 2017.

Overall sales volume increased 13% to 33.3 million tonnes in 2017, up slightly from 29.5 million tonnes in 2016.

In November 2017, Wilmar’s wholly-owned subsidiary, Wilmar Kuantan Edible Oils Sdn. Bhd., entered into an agreement with Cargill Palm Plantation Sdn. Bhd. (Cargill) for the purchase of Cargill’s edible oil facilities in Kuantan, Malaysia.

The edible oil facilities include a palm oil refinery and a neighboring storage facility.

The transfer of ownership is expected to occur by the end of 2018.

“We continue to work on the proposed listing of our China operations, with the internal restructuring of the operations largely completed,” Khoon Hong said. “As the proposed listing is still at the evaluation stage, shareholders are advised to exercise caution in trading their shares. There is no certainty or assurance as at the date of this announcement that the listing proposal will be carried out.”

Wilmar’s business activities include oil palm cultivation, oilseed crushing, edible oils refining, sugar milling and refining, manufacturing of consumer products, specialty fats, oleochemicals, biodiesel and fertilizers as well as rice and flour milling. At the core of Wilmar’s strategy is an integrated agribusiness model that encompasses the entire value chain of the agricultural commodity business, from cultivation, processing, merchandising to manufacturing of a wide range of branded agricultural products. It has more than 500 manufacturing plants and an extensive distribution network covering China, India, Indonesia and some 50 other countries. The group has a multinational workforce of about 90,000 people.

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