The African swine fever outbreak has hurt the demand for its key product soybean.
Wilmar International’s net profit plunged 52.3% to $208.99m (US$150.88m) in Q2 from $438.23m (US$316.40m), no thanks to lower crush margin for the quarter.
The agribusiness firm stated that the African swine fever outbreak’s impact on soybean meal demand was greater than previously expected. The profit decline partially offset by strong performances from consumer products and oleochemicals.
Revenue in Q2 also dipped 9%YoY to $13.55b (US$9.78b) from $14.89b (US$10.75b) in 2018, due to lower commodity prices and it was partially offset by a 4% sales volume growth.
Meanwhile, its H1 core net profit crashed 20% YoY to $591.58m (US$427.14m) from $741.44m (US$535.34m) in 2018.
Its tropical oils segment reported a 15% YoY growth in pre-tax profit to $245.56m (US$177.3m) thanks to the boost from its stronger performance from the manufacturing and merchandising business. However, its crude palm oil (CPO) prices and production yields went lower. This has resulted in reduced contributions from the plantation business.
Oilseeds & grains segment registered a lower pre-tax profit of $81.99m (US$59.2m) in the same quarter from $401.92m (US$290.2m), attributed to the absence of strong crush volume and margins experienced in Q2 2018.
Its sugar segment, on the other hand, had pre-tax loss of $96.12m (US$69.4m) in the period from $63.99m (US$46.2m) in Q2 2018. The weaker result was mainly due to the consolidation of Shree Renuka Sugars, which became a subsidiary in June 2018.
Lastly, the others segment’s pre-tax profit of $8.59m (US$6.2m), reversing from its $36.43m (US$26.3m) loss in Q2 2018. This was driven by positive contributions from its shipping and fertiliser businesses.
Furthermore, Wilmar’s joint ventures & associates had lower contributions of $2.63m (US$21.9m) for the quarter as its Chinese associates saw weaker performance. Its interim tax exempt (one-tier) dividend for H1 is $0.03 per share.
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