Wilmar net profit expected to rise 6%-13% in Q1
Yihai Kerry Arawana's turnaround and the company's sugar milling segment contributed to the earning growth.
UOB Kay Hian expected Wilmar International's net profit for the first quarter of 2023 to grow 6%-13% to $467m-507m (US$350m-380m) from $438m (US$328m) in the same quarter of 2022.
Its Regional Morning Notes said that Wilmar International's expected growth in earnings came mainly from Yihai Kerry Arawana Holdings' (YKA) turnaround within the quarter.
"For 1Q23, we believe the contribution from YKA will surely be higher year-over-year on better food product segment contribution, mainly driven by consumption spending to drive the sales volume for consumer packs and sales for medium and bulk segments, thanks to festival demand," UOB Kay Hian said.
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UOB Kay Hian also expected some profit contribution from Wilmar International's sugar milling segment with the delayed harvesting season to 23 January.
"In 2H22, high rainfall in Queensland delayed the harvesting, causing some milling profit to carry over into 1Q23. The profit compensated for the weaker contributions from palm oil, whilst sugar merchandising continues to benefit from a larger white sugar premium," UOB Kay Hian said.