Wilmar reveals its growth drivers over the next two years

Rice business in China is one driver.

According to OCBC, Wilmar International Limited (WIL) has posted a much stronger-than-expected set of FY12 results. Although reported net profit was down 21.6% at US$1255.5m, but core earnings (down 23.1%) at US$1167.0m was still 14% ahead of our forecast.

Here's more from OCBC:

We note that the outperformance came mainly from 32% jump in PBT from its Palm & Laurics division; this driven by the revised Indonesian export tax structure. WIL has declared a final dividend of S$0.030/share (versus S$0.031 last year), bringing its total dividend to S$0.05 for FY12, or 18% lower than last year.

Going forward, management remains “cautiously optimistic” about its long-term prospects. On growth drivers over the next two years, management believes that its fledging flour and rice business in China would continue to put in strong double-digit growth, and potentially be a larger market than for cooking oil.

We understand that WIL is also looking to expand its plantation business further in Africa and even Myanmar, the largest country in mainland SE Asia. Separately, WIL and Noble Group has formed a 54:46 JV that will own 23k ha of land for palm production in Papua, Indonesia; the JV will also jointly explore and develop further palm oil opportunities there.

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