Wilmar International reports lower core net profit of US$323.6 mil for the 3QFY2023, 59.4% lower y-o-y

Wilmar’s lower core net profit is due to compressed refining margins from its tropical oil business, in line with industry trends.

Agribusiness group Wilmar International F34 has reported a lower core net profit of US$323.6 million ($443.62 million) for the 3QFY2023 ended Sept, a 59.4% decrease y-o-y from US$796.7 million in 3QFY2022.

The group says this is mainly due to compressed refining margins from the tropical oils business, in line with industry wide trends, and a weaker performance from its fertiliser operations.

Its net profit for the period came in at US$313.9 million.

For the 9MFY2023, the group reported a core net profit of US$900.9 million, a 53.9% decrease y-o-y, while its net profit came in at US$864.8 million, 55.2% lower y-o-y.

The group says that the 9MFY2022 results included a gain on dilution of interest in Andani Wilmar Limited amounting to US$175.6 million.

The group says that its weaker results for this quarter were partially offset by its sugar milling and merchandising businesses, and improved crushing margins arising from tightness in availability of soybean in China.

It says that its consumer products business improved in 3QFY2023 due to better margins and higher sales volume, while their joint ventures and associates also contributed favourably for the quarter.

With lower palm oil and oilseeds and grains prices during the period, the group had lower net working capital requirements. This resulted in generated net cash flows from operating activities of US$4.49 billion.

As at Sept 30, the group’s free cash flow stood at US$2.56 billion.

The group’s net debt for this period stood at US$16.92 billion, and its net gearing ratio came in at 0.88 times, lower than 0.94 times in FY2022.

The group has unutilised banking facilities amounting to US$26.26 billion for this period.

It says that despite the positive profit for the period, shareholders’ funds were lower at US$19.26 billion as a result of a strengthening US Dollar which led to lower translation reserve.

The group believes that results for the rest of the year will be satisfactory, as operating conditions were better in 3Q2023, and is anticipated to remain positive for the rest of the year.

“Sugar merchandising, milling and refining will remain good with higher sugar prices while tropical oils refining margins will continue to normalise after exceptional conditions last year. Barring unforeseen circumstances, we believe results for the rest of the year will be satisfactory,” the group notes.

Shares in Wilmar International closed 2 cents higher, or 0.58% up at $3.47 on Oct 26.

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