Wilmar reports lower Q3 profits despite improved oilseed crush
December 06, 2017
Wilmar International, one of Asia’s leading agribusinesses, has reported lower net profits in the third quarter (Q3) of 2017, despite improving business in the oilseeds and grains segment.
On 13 November, the firm reported a net profit to US$370M for the Q3 that ended on 30 September, marking a 6% decline from US$392.2M in the same period in 2016.
Revenue, however, improved slightly, rising 0.4% from US$11.08bn in Q3 2016 to US$11.13bn due to increased sales in oilseeds and grains, which was still not enough to offset weaker results in tropical oils and sugar.
Wilmar reported that its oilseeds and grains segment generated pre-tax profits of US$253.7M in Q3 2017, up 2.2% from US$248.1M in 2016 due to high crush volumes and good crush margins.
“We expect the good performance in the oilseeds and grains segment to continue into the fourth quarter, with crush margins and volume anticipated to remain positive,” said Wilmar chair and CEO Kuok Khoon Hong.
Tropical oils registered a large drop in pre-tax profits, falling 51% from US$169.3M in Q3 2016 to just US$83.1M in 2017, mainly due to lower processing margins, Wilmar said.
The poor processing results were partially offset by higher production yield – up 12% to 5.2 tonnes/ha from 4.7 tonnes/ha – and better production volumes in fresh fruit bunches, which increased 12% to 1.032bn tonnes.
Sugar reported a 13% decline in pre-tax profit to US$75.2M, while the joint ventures and associates sector increased 79% to US$51.3M.
Khoon Hong said the performance of Wilma’s other business sectors was expected to be satisfactory going into the fourth quarter, carried by good economic performance in key Asian countries.
“We will continue with our expansion plans, especially in oilseeds and grains including customer products,” he said.
Wilmar’s activities in Asia include oil palm cultivation, oilseed crushing, edible oils refining and sugar milling and refining.
The company also manufactures consumer products, speciality fats, oleochemicals, biodiesel and fertilisers, in addition to milling rice and flour.