SINGAPORE — Wilmar International Limited said on May 8 that net profit for the first quarter increased 23% to $315.4 million due to a sharp recovery in its oilseeds and grain business.
Excluding non-operating items, the group’s net profit registered robust growth of 53% to $313.7 million in the quarter compared to $205.6 million for the same quarter a year earlier. Last year, non-operating items benefited from higher gains from investment securities.
Oilseeds & Grains registered an increase of 6% in sales volume to 4.7 million tonnes due to increased demand for the Wilmar’s products. The group recorded a strong pretax profit of $47.2 million, a sharp reversal from the losses in the first quarter of 2012. The better performance was due to improved margins in soybean crushing and flour milling. The positive crush margins during the quarter were a result of lower cost of imported soybeans and higher local product prices, due to late arrival of soybeans in China.
“With our resilient integrated business model and new businesses developed in the last few years, we are reasonably confident that we will overcome the difficult environment expected for the rest of the year,” said Kuok Khoon Hong, chairman and chief executive officer. “Whilst palm oil price is likely to remain low, affecting Plantation’s profitability, the declining price trend is expected to benefit our downstream value-added businesses. In addition, we expect stronger contributions from our new businesses. In China, the bird flu will affect meal consumption in the short term but is not expected to have a long-term effect. We remain optimistic about the long term prospects of China.”
Consumer Products benefited from volume growth, while Sugar reported lower milling losses in the off harvesting season and enjoyed higher merchandising profit and stronger refinery margins. Associates also performed better during the quarter. Palm & Laurics continued to show a strong performance although margins were lower than in first-quarter 2012. Plantations & Palm Oil Mills continued to be affected by lower crude palm oil (CPO) prices.
Despite strong volume growth across all business segments, revenue was down 3% to $10.20 billion for the quarter, due to significantly lower selling prices for palm and sugar products.
As at March 31, 2013, total assets stood at $43.31 billion while shareholders’ funds grew to $14.7 billion.