SINGAPORE — Olam International Limited reported on Feb. 14 that operational profit after tax and minority interests for the six months ended Dec. 31, 2013, dropped 2.6% to S$174.6 million ($138.4 million).
Profit after tax and minority interests (PATMI) dropped 8.5% to S$180.5 million, while earnings before interest, tax, depreciation and amortization (EBITDA) increased 5.4% to S$564.8 million from the same period last year.
Sales volumes were down 5.3% in the first half of fiscal year 2014, compared to the same period a year ago, which had shown a record 71.9% growth over the prior period. These results include an overall reduction in the fair value of biological assets by S$44.2 million, from a net gain of S$32.2 million in 2013 to a net loss of S$12.0 million in 2014.
The decline in operational PATMI was primarily driven by higher depreciation and amortization expenses at S$110.6 million compared to S$83.9 million in 2013 and an increase in tax expenses to S$27.4 million as compared to S$18 million (excluding exceptional items) for the prior corresponding period.
Sales volume for Food Staples & Packaged Foods fell by 5.5% and revenues declined by 8.5% mainly due to lower volumes and prices for its grains and rice businesses after an exceptionally strong 2013. EBITDA declined by 16.8% due to a combination of lower grains and rice volumes, lower rice margins and continued operational challenges in the upstream dairy business.
“We are pleased with the progress made in the first half of FY2014, both in terms of operating performance as well as execution against our four strategic priorities and six key pathways identified in our strategic plan,” said Olam’s Group Managing Director and Chief Executive Officer Sunny Verghese. “This is reflected in the EBITDA growth and improved cash flow generation for the period.
“We will continue to work on all these pathways to achieve our twin goals of pursuing profitable growth and generating positive free cash flow on a sustained basis.”