Olam 4Q and FY18 earnings fall on absence of exceptional gain, lower PATMI

SINGAPORE (Feb 28): Olam International reported 4Q18 earnings of $75.3 million, down 71.6% from a year ago due to a large exceptional gain of $155.4 million recorded in 4Q17.

Operational PATMI, which excludes exceptional items, was lower by 34.4% y-o-y to $72 million on improved performance from Cocoa, Packaged Foods and Wood Products was offset by lower contribution from Peanuts, Coffee, Rice and Dairy businesses.

For FY18, earnings was down 40.1% to $347.8 million due to the large exceptional gain of $149.2 million in FY17; operational PATMI down 19.7% to $346.6 million.

In its Confectionery and Beverage Ingredients segment, EBITDA rose 35.5% to $444.0 million with Olam saying its Cocoa business performed exceptionally well in both supply chain and processing operations, offsetting the weaker results from Coffee.

EBITDA for Food Staples and Packaged Foods was lower by 19.7% to $288.8 million, compared with a strong 2017 performance as Packaged Foods’ improved performance was offset by lower contribution from the Dairy, Rice, Edible Oils and Animal Feed businesses.

EBITDA for Industrial Raw Materials, Infrastructure and Logistics fell 10.7% to $176.2 million on lower contribution from GSEZ, offsetting growth from Wood Products and Rubber.

EBITDA for Commodity Financial Services posted a loss of $13.1 million in 2018 compared with EBITDA of $4.8 million in 2017. This was largely due to losses from the Fundamental Fund business, which was closed in 4Q18.

The board has recommended a final dividend of 4.0 cents per share, maintaining total dividend at 7.5 cents per share for FY18.

While political and economic uncertainties are expected to continue, Olam believes its diversified and well-balanced portfolio provides a resilient platform to navigate the challenges in both the global economy and commodity markets.

Shares in Olam closed 3 cents higher at $2.01 on Thursday.