AGRIBUSINESS | Staff Reporter, Singapore

Wilmar's profits to turn sour due to delayed sugar harvest

It's expected to make profits of $476.39m, down from last year's $780.09m.

Wilmar International (Wilmar) will release its 4Q2017 results on 22 February 2018.

It is expected to make profits of about $476.39m (US$360m) to $502.81m ($380m), up from $428.35m (US$323.7m) in the previous quarter, but worse than $780.09m (US$589.5m) last year, UOB Kay Hian said.

According to a report, a worse yearly performance can be expected from Wilmar, because of "unusual" events.

Sugar harvesting was delayed to early-January 2017 so 4Q2016 registered higher crushing volume vs 3Q2016.

The company also saw uneven Chinese New Year demand in 4Q2016, causing strong oilseeds and grains performance.

Its tropical oils division earnings also turned strong because of palm oil production volume which picked up strongly in 4Q2016 after 9M2016 suffered a severe drought impact from 2015’s El Nino.

However, a better quarterly performance can be expected because of higher contribution from its tropical oils division, due to recovered biodiesel deliveries.

Its sugar division could have also shown better performance, thanks to higher sugar merchandising and processing sales volumes from a higher contribution from its Brazil joint venture (JV).

UOB Kay Hian analyst Leow Huey Chuen said, "2017 was not a good year for sugar; sugar prices did not live up to market expectations due to the unexpected release of sugar reserves by the Indian government to make up for the production shortage post El Nino." 

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