Wilmar International Ltd. (WIL), the world’s largest palm oil trader, said second-quarter profit rose 87 percent on increased sales volumes and after its oilseeds unit swung to a profit.
Net income was $218.5 million in the three months ended June 30, compared with $117.1 million a year earlier, the Singapore-based company said yesterday in a statement. That missed the $286 million average estimate of three analysts surveyed by Bloomberg. Sales declined 5.4 percent to $10.4 billion, driven by lower palm oil prices.
Palm oil, the world’s most-used edible oil, tumbled to the lowest level in more than three years last month and has declined 7.9 percent this year. Wilmar said yesterday in its outlook that while lower palm prices add to challenges, cheaper costs for commodities will benefit the company.
“The current low crude palm oil prices and declining refining margins in Indonesia add to an already challenging operating environment,” Chief Executive Officer Kuok Khoon Hong said in a separate statement. Lower raw material prices for its downstream products and recent investments such as in sugar and specialty fats, “will have positive contributions,” he said.
Wilmar’s palm processing and trading unit, its biggest, posted a 40 percent gain in pretax profit and a 10 percent increase in sales volume as it added refining capacity in Indonesia. The company buys more than 90 percent of the palm oil for its refineries from third parties.
Its oilseeds unit, which processes soybeans in meal and oil, posted a $15.3 million profit before tax in the quarter compared with a $40 million loss a year earlier as margins remained positive.
Volumes rose 22 percent at its consumer products unit and 64 percent at its sugar unit, Wilmar said.
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