Higher crush volumes buoys Wilmar's sales

by Holly Demaree-Saddler
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soybeans
Company expects U.S., China tariff dispute to impact soybean prices in second quarter. 
 
SINGAPORE — Wilmar International Ltd.’s net profit for the first quarter of 2018 ended March 31 was $203.3 million, equal to 3.2¢ per share on the common stock, down 41% from $342 million, or 5.4¢ per share, in the same period as last year.

Revenue for the year was $11.169 billion, up from $10.57 billion in 2017. Wilmar noted the increase in Oilseeds & Grains sales volume as well as higher commodity prices drove revenue up 5.7%.

The Oilseeds & Grains segment posted a pretax profit $172.6 million down compared $207.7 million in the first of 2017. Overall sales volume hit 8.9 million tonnes, up 24% compared with 7.1 million tonnes. Wilmar attributes the sales increase to higher crush volume and Consumer product sales due to the later Chinese Spring Festival in 2018.

Kuok Khoon Hong chairman and chief executive officer of Wilmar
Kuok Khoon Hong, chairman and chief executive officer

“The prospect of China imposing import tariffs on U.S. soybeans will result in soybean prices staying volatile for the coming quarter,” said Kuok Khoon Hong, chairman and chief executive officer. “Even though performance of our Oilseed Crushing business will not be affected in the short term, a prolonged standoff between China and the U.S. would affect the utilization of our crushing plants. Nevertheless, we foresee that any negative effect will be partially mitigated by better performances from both our flour and rice businesses. Overall, we are cautiously optimistic that performance for the rest of the year will be satisfactory.

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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