Olam International Ltd., the food commodities supplier part owned by Singapore’s Temasek Holdings Pte, said first-quarter profit gained 26 percent as sales volumes almost doubled.
Net income was S$43.2 million ($35.3 million) in the three months ended Sept. 30, from S$34.2 million a year ago, Singapore-based Olam said today in a statement. That compares with the S$27.6 million average estimate of four analysts surveyed by Bloomberg News. Revenue increased 45 percent to S$4.69 billion.
Sales by volume jumped 98 percent in the quarter driven by an increase in grains, Olam said. Today’s result also included an operational gain of S$10.1 million because of “fair valuation of biological assets,” that the company began in the third quarter of last year and didn’t do in the corresponding first quarter, Olam said.
Olam fell 4.4 percent to S$1.76 in Singapore, the lowest since July 25. The result was announced after the close of trade. The stock has lost 17 percent this year, making it the third-worst performer on the benchmark Straits Times Index.
Net contribution -- revenue after cost of sales, shipping and logistics expenses, claims, commissions, bank charges and net interest -- from its food staples and packaged foods unit, the largest, advanced 37 percent to S$111 million, as milling volumes in Africa and trading volumes in Australia, Russia and Ukraine increased.
“Food raw materials, being relatively more recession-resistant, have shown their continued strong trajectory of growth and are expected to continue to underpin our future growth,” Chief Executive Officer Sunny Verghese said in a separate statement.
Net contribution from its industrial raw materials business, supplying cotton, wood, and rubber, fell 4.2 percent to S$29.2 million. Its commodity financial services unit had net contribution of S$3.9 million, compared with a year earlier loss.
Its confectionery and beverage unit, which procures cocoa and coffee, posted a 10 percent gain in net contribution and the division selling nuts, spices, and beans recorded a 22 percent gain from a year earlier, Olam said today.
The first quarter normally accounts for only 5 percent to 10 percent of the company’s full-year profit due to seasonality of agricultural products, Olam said in today’s statement.