Olam’s First-Quarter Profit Rises 5.7% as Cash Flow Improves

Olam International Ltd. (OLAM), the commodity supplier backed by Singapore’s Temasek Holdings Pte, said first-quarter profit gained 5.7 percent as it targets positive free cash flow this year.

Net income was S$45.6 million ($36.6 million) in the three months ended Sept. 30, compared with S$43.2 million a year earlier, Singapore-based Olam said today in a statement. Sales declined 7.9 percent to S$4.3 billion due to lower commodity prices, it said.

Olam, which sells commodities from rice to cocoa, is cutting spending and selling assets as part of a business review in April that followed allegations by short-seller Muddy Waters LLC questioning its finances. The company announced yesterday an agreement to sell and lease back almond orchards in Australia for A$200 million ($186 million) to improve cash flow and return on capital.

“We are particularly pleased with the improvement in free cash flow generation in this quarter, which is a priority for us,” Chief Executive Officer Sunny Verghese said in the statement.

The shares advanced 1.7 percent to S$1.495 at the Singapore close, before the results announcement.

To contact the reporter on this story: Michelle Yun in Hong Kong at myun11@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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