See how agribusiness’ key players will fare in profits game

Wilmar to lead the pack with 57% jump.

According to Nomura, it expects 4QCY12 to be marginally better for supply chain players as fundamental trading conditions seem to be improving with moderate volatility in commodity prices, improving soybean crush margins etc. Overall, it expects Wilmar’s earnings to increase 57% y-y on a much weaker 4Q11; Olam’s by ~12% y-y, while Noble’s earnings should be up 45% y-y.

Here’s more:

For Olam, 2Q13F should be relatively decent, with a ~12% increase in adj net profit mainly driven by volume growth. For Wilmar, we expect 4Q12F to be similar to 3Q12, with improving crush margins and much weaker CPO margins.

For Noble, we estimate 4Q12F net profit of US$111mn (up 45% y-y) on the back of improved margins in agri.

Wilmar: China oilseed crush and CPO margins to remain weak. Soybean crush margins have picked up decently in 4Q12 across the industry; we believe Wilmar’s 4Q12F crush margins may only be slightly higher than 3Q12 levels because of legacy soybean inventory.

Weak CPO prices to impact plantations segment margins, in our view. We estimate CPO PBT/ton of US$130 for 4Q12F (lowest in past 3
years). As sugar cane crushing season commences, we expect strong PBT contribution from Sugar milling segment may record US$85mn of PBT during 4Q12F.

Consumer pack margins should have stabilized at the previous quarter’s level as vegetable oil prices remain soft. Noble: PBT margins to improve across segments. We estimate Noble’s 4Q12F adjusted earnings at ~USD111mn.

We expect overall 4Q12F volumes to remain flat y-y. Agri margins should improve as sugar begins to contribute and amid marginal improvement in China crush margins. MMO business should be mostly in line with the last few quarters.

Olam: We expect better volume growth in 2Q13F. We estimate 2Q12F net profit of US$117mn. Industrial raw materials business may see slight improvement with GC/ton at S$100 for 2Q13F, in our view. Update on Gabon project would be keenly awaited; we don't expect significant progress on that yet.

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