AGRIBUSINESS | Staff Reporter, Singapore

Wilmar's sugar losses hit US$107 in Q2

Consumer products earnings were also hurt by higher-priced inventories.

The past quarter was disappointing for agriplayer Wilmar as it recorded lower profits.

According to CIMB, Wilmar's core net profit dropped to US$37m due to the weaker performance from tropical oils and losses from its sugar business.

Its sugar losses expanded to US$107m, with its trading division reporting losses for the first time since the group ventured into sugar.

Meanwhile, its tropical oils division was impacted by the untimely purchase of raw materials and weaker processing margins.

"On top of this, consumer products earnings were impacted by higher-priced inventories in 2Q17," analyst Ivy Ng Lee Fang said.

However, the group is optimistic for the second half of the year.

The group explained that most of the negative factors that affected its results in 1H are unlikely to repeat in 2H.

"The better 2H results will be driven by seasonally higher sales volumes from its tropical oils, oilseeds and grains divisions. On top of this, the group has used up most of the high-priced inventory in the consumer pack division, and sugar division typically delivers stronger results in 2H17," the analyst explained.

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