Wilmar's profits grew 25.4% to $1.58b in 2017

Oilseeds & Grains profit rose to $272.33m thanks to stronger sales.

Wilmar International reaped a bountiful harvest in 2017 as its profits grew 25.4% to $1.58b (US$1.2b).

According to OCBC Investment Research, the good performance in Oilseeds & Grains and strong contributions from joint ventures and associates (mainly from China, India and Africa) were offset by weaker results in the Tropical Oils and Sugar businesses.

The oilseeds and grains segment’s pre-tax profit rose to $272.33m (US$206.5m) from (US$177.9m) in 4Q2016, aided by good crush margins and stronger sales. Tropical Oils saw a 43% drop in pre-tax profit to $138.32m (US$104.9m) due to lower processing margins downstream, lower plantation yield and CPO prices.

Sugar saw a 69.5% fall in pre-tax profit to $54.59m (US$41.4m), mainly due to timing effect from the new sugar marketing program in Australia. Under this program, a certain proportion of sugar produced would only be sold in 1H18.

Wilmar reported a 3.3% YoY fall in revenue to $15.16b (US$11.5b) and a 23.8% drop in net profit to $563.79m (US$427.5m) in 4Q2017. Sugar harvesting was delayed to early-January 2017 so 4Q2016 registered higher crushing volume vs 3Q2016.

OCBC analyst Low Pei Han said, “We like Wilmar’s integrated business model and well-diversified operations, and the group expects to continue to achieve sustained growth. The internal restructuring of operations for the proposed listing of its China business is now largely completed.”

Wilmar has declared a final dividend of 7 cents per share, bringing full-year dividends to 10 cents per share. This is 54% higher compared to 6.5 cents per share in 2016 and represents a dividend payout of about 39% for 2017.

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