OLAM outlook remains positive as industry recovers
Initial estimates showed its operational profit grew 15.5% in the first quarter.
Agricultural commodities company Olam International Limited expects it will ride on the recovery of industry as demand for food and other supplies continues to grow.
“With 80-85% of the Group’s revenues in the food category, where demand is less sensitive to recession or economic downcycles, the Group believes that it will be able to better navigate the market uncertainties in 2021,” the SGX-listed group said in its report.
The group registered an operational profit of $157m, up 15.5% from $135.9m from the same quarter last year.
Total sales volume rose 2.4% to 8.6 million metric tonnes with growth coming from its units Olam Food Ingredients (OFI) and Olam Global Agri (OGA). Whilst its revenue increased 14.5% to $8.79b over the same period.
The Group’s Dairy business is seen to deliver a strong performance as demand for almonds and Dairy bounce back in the second half of 2020.
OFI is also likely to benefit with incremental earnings contribution from the newly acquired businesses in the US. Olam had just completed the acquisition of a US-based Cascade Specialties, chili pepper business and dehydrated onion ingredients.
In May, it also bought US private label spices and seasonings manufacturing Olde Thompson.
Moreover, the Group likewise expects its OGA operations will register a strong growth in the first half of the year.