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Olam's Q2 profit jumps 28.5% to $147.7m
It reaped good gains from its food business.
It was a good harvest season for Olam International as it posted improvements in both revenue and profits in the past quarter ending in June.
According to the group, it reported a 30.9% increase in revenue to $6.5b and a 28.5% jump in profits to $147.7m.
This is due to the improved operational performance across all four key segments, especially in the Food Category.
The Group’s Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) grew by 18.4% to $373.7m on stronger performance by four of its five business segments, particularly the food category.
Edible nuts, spices & vegetable ingredients, confectionery & beverage Ingredients, food staples & packaged foods as well as the industrial raw materials, Ag logistics & infrastructure segment all did better than a year ago. Sales volumes were up 28.6% as most segments registered higher volumes.
Here's more from the group:
Revenue for the Edible Nuts, Spices & Vegetable Ingredients segment grew 16.0% in H1 2017, mainly on higher volumes and higher prices of cashew and peanuts compared to H1 2016. EBITDA grew 42.4%, primarily due to improved earnings from cashews, peanuts, almonds and sesame.
The Confectionery & Beverage Ingredients segment recorded a 6.7% increase in revenue on higher overall volumes and higher coffee prices, which was offset by lower cocoa prices in H1 2017. EBITDA declined by 5.5% as higher earnings from the Coffee platform was offset by lower contribution from the Cocoa platform, which experienced headwinds and margin pressure in its supply chain and trading business.
The Food Staples & Packaged Foods segment registered a 52.7% increase in revenue mainly on higher trading volumes, especially in Grains and Edible Oils in H1 2017. EBITDA grew 31.5% as most platforms within the segment showed improved performance. Grains was a key growth driver as its origination and trading business, as well as its wheat milling operations in West Africa, continued to perform well.
Revenue for the Industrial Raw Materials, Ag Logistics & Infrastructure segment was up 49.9% on higher Cotton volumes in H1 2017. EBITDA edged up 1.2% as improved performance from GSEZ offset underperformance from Wood Products, while Cotton remained steady.
Commodity Financial Services also contributed to EBITDA growth with S$6.3 million in H1 2017 compared to S$0.9 million a year ago.
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