Oilseeds, Grains Push Wilmar Earnings up 49%
Asia’s leading agribusiness group, Wilmar International Ltd., announced that net profits for the group increased 49% year on year in the first quarter of 2015, up from $161.8 million a year ago to $241.2 million, on the back of strong results for oilseeds and grains. In addition, the group’s core net profit increased 23% year on year from $214.6 million a year ago to $263.3 million this first quarter, while revenues slipped by 8% to $9.41 billion as a result of lower commodity prices.
Moving into the second quarter, the group expects crush margins to remain positive through mid-year, but foresees challenges remaining for its Tropical Oils division amid a difficult market environment. The group believes however that it can ride out these challenges, particularly if the Indonesian government puts its biodiesel support policy into play.
“Overall, we are cautiously optimistic that second quarter performance will be satisfactory,” Kuok Khoon Hong, Wilmar International chairman and chief executive tells World Grain.
The Oilseeds and Grains division saw pretax profits soar from $13.6 million in the first quarter 2014 to $166.1 million in the first quarter of this year on improved performance in Consumer Products and positive crush margins due to China’s reduced soybean imports by traders and lower soybean prices. Oilseed and Grain Manufacturing saw a 13% increase in sales year on year to 4.8 million tons due to expansion of operations and higher crush margins.
Tropical Oils experienced a 44% decline in pretax profits to $152.1 million on lower contributions from the Manufacturing and Plantations businesses as a result of lower crude palm oil prices, industry overcapacity, tighter supplies, and lower demand for palm products. However, falling feedstock prices helped improve profitability for the group’s downstream products.