SINGAPORE — Wilmar International Limited announced on May 7 that net profit for the first quarter increased 49% to $241.2 million from $161. 8 million a year earlier, primarily because of the strong performance from Oilseeds and Grains.
The group’s core net profit (excluding non-operating items) increased 23% to $263.3 million from $214.6 million in the same quarter a year ago. Revenue declined 8% to $9.41 billion due to lower commodity prices.
“Crush margins are expected to remain positive going into mid-2015. Consumer Products will continue to grow globally with reasonable margins,” said Kuok Khoon Hong, chairman and chief executive officer. “Although operating conditions for Tropical Oils will remain challenging, we believe we will be able to overcome the current difficult environment, especially if the Indonesian government implements its proposed support policy for biodiesel. Overall, we are cautiously optimistic that second quarter performance will be satisfactory.”
The Oilseeds & Grains division saw pretax profit increase from $13.6 million in 2014 to $166.1 million in 2015. The strong growth was driven by improved crushing margins and better performance in Consumer Products. Crushing margins improved due to lower soybean imports into China by financial traders and lower soybean prices.
Lower feedstock costs, together with higher sales volume, contributed to improved margins. Sales volume for Oilseeds & Grains Manufacturing registered a 13% increase to 4.8 million tonnes due to higher crushing volume and continued expansion in the group’s grains operations. Consumer Products sales volume grew 3% to 1.5 million tonnes.
Tropical Oils (Plantation & Manufacturing) registered a 44% drop in pretax profit to $152.1 million as a result of lower contributions from both Plantation and Manufacturing businesses.
Lower crude palm oil (CPO) prices contributed to the lower Plantation profit. In addition, refining margins continued to contract on the back of industry overcapacity, tighter CPO supplies and weaker demand for palm products. However, lower feedstock costs helped improve profitability for the Group’s downstream products. Sales volume from Tropical Oils Manufacturing remained flat at 5.6 million tonnes.