SINGAPORE — Olam International Limited announced on Aug. 29 that its 2013 profit after tax and minority interest (PATMI), excluding exceptional items, decreased 2% to S$348.6 million from S$355.5 million in 2012.
For the fourth quarter, PATMI dropped 48.1% to S$56.8 million, due to the impact of higher tax charges of S$50.6 million recognized in the quarter, compared to a net tax credit of S$8.2 million in the fourth quarter of 2012.
“Our headline results were dampened somewhat by the impact of increased tax charges versus last year and challenging market conditions which emerged in Q4 and affected some parts of our business. Despite this, underlying performance in most segments was robust overall, reflecting the strength of our business model and diversification in the sources of earnings across our platforms and geographies,” said Olam’s Group Chief Executive Officer Sunny Verghese. “We see this as a transition year and we are three months into our strategic plan implementation. We remain focused on the twin goals of pursuing profitable growth and sustained cash flow generation.”
Sales revenue for the full year increased 21.7% to S$20.8 billion, and sales volume was up 49.5% to 16 million tonnes.
Full year tax charges were up from S$34.1 million in 2012 to S$105.1 million in 2013, primarily due to increased business and PBT contribution from higher tax jurisdictions; one-off and non-recurring tax charges of S$12.8 million resulting from the sale of the Basmati rice mill in India and the sale-and-leaseback of almond orchards in the U.S.; and tax credit received in the previous year.
While the long term trends in the agri-sector remain attractive, the nearer term macroeconomic uncertainty and increased volatility could impact the sector, Olam said. The company’s diversified portfolio with leadership position in many of its segments provides a resilient platform to navigate the uncertainties in the global markets, it said. The company’s strategy for the plan period from 2014 to 2016 has already been announced and the focus remains on execution and extracting full value from investments already made and generating positive cash flow.