May 15 (Bloomberg) -- Olam International Ltd., the commodity trader targeted by short-seller Carson Block, said its third-quarter profit gained 10 percent as sales volumes jumped at its grains business.
Net income was S$108.5 million ($87.3 million) in the three months ended March 31, from S$98.7 million a year earlier, Singapore-based Olam said today in a statement. Revenue increased 12 percent to S$4.7 billion.
Olam, the world’s second-largest rice trader, said last month that it’s slashing capital spending over the next three years by about S$1 billion and will seek to sell assets to raise cash. The decision came five months after Block and his research firm Muddy Waters LLC first questioned the company’s finances.
The revised strategy “is being implemented and is expected to generate shareholder value through continued profitable growth, and enhanced cash flow generation in the coming quarters,” Olam said today in the statement.
Shares of Olam declined 1.7 percent to S$1.785 at the close in Singapore yesterday. The statement today was made before the stock market started trading. The stock has gained 14.8 percent this year, outperforming the 8.4 percent increase in the benchmark Straits Times index.
Olam, which also shelved its $1 billion earnings target, will seek to raise about S$1.5 billion in cash by fiscal 2016 by selling assets and scaling down some operations, the company said last month after it completed its annual business review. Chief Executive Officer Sunny Verghese said the review had been broad and reflected stakeholder feedback.
Muddy Waters in November questioned Olam’s debt, acquisitions and accounting, and likened it to Enron Corp., the Houston-based company that was the world’s largest energy trader before it plunged into bankruptcy in December 2001. Olam rejected the allegations and sued Block, a case it dropped after investor feedback.
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