“Our 2012 results, while marginally lower than last year, demonstrate the resilience of Olam’s business model and an ability to deliver across volatile commodity and economic cycles. Despite a tail event in the cotton platform and recessionary conditions in the industrial raw materials segment, our well balanced portfolio, combined with our risk management systems, have enabled us to navigate the challenges posed by these tough trading conditions relatively well,” said Olam’s Group Chief Executive Officer Sunny Verghese. “From a strategic perspective, we continue to make substantial progress towards our goal of achieving $1 billion in after-tax profits by 2016.”
During 2012, sales volume grew 26.3% to 10.7 million tonnes while sales revenue increased 8.2% to S$17.09 billion. Overall net contribution (NC) grew 13.0% to S$1.38 billion. While sales volume rose, NC per tonne was lower at S$129 compared to S$145 in 2011, impacted primarily by lower NC from the non-food category.
Sales volume in the fourth quarter increased 50.7% to 3.5 million tonnes. Sales revenue growth was lower at 12.8% during the period as a result of lower commodity prices across most products. NC growth was 8.1%, moderated by the lower contribution from the Non-food category during the quarter and the high base of the previous year. For the same reason, NC per tonne margin declined to S$127 from S$178.
“The food-related business segments continued their solid trajectory of growth from the last two years and accounted for 76.4% of Group revenue and 87.0% of NC. Sales volume increased by 31.5% and NC increased by 31.6% compared to 2011,” said Olam’s Executive Director – Finance and Business Development, Shekhar Ananthraman.