Wilmar Third-Quarter Profit Rises 2.5% as Volumes GainMichelle Yun
Wilmar International Ltd., the world’s largest palm oil trader, reported a 2.5 percent increase in third-quarter profit as volumes from its sugar and consumer-product business gained.
Net income was $416 million in the three months ended Sept. 30, compared with $405.8 million a year earlier, the Singapore-based company said today in a statement. Sales declined 4.2 percent to $11.8 billion.
Wilmar, with its shares heading for the first annual gain in four years, said in August cheaper costs for commodities would benefit the company even as lower palm oil prices add to challenges. Sales volume at its sugar business jumped 44 percent in the quarter, while from its consumer-product unit gained 14 percent on stronger demand for edible oils and flour.
“Our investments in recent years in capacity expansion, new businesses and downstream products have enabled Wilmar to realize volume growth and to maintain margins amidst low crude palm oil prices,” Chief Executive Officer Kuok Khoon Hong said in the statement today.
The stock increased 0.9 percent to S$3.45 today at the close in Singapore, before the announcement. Wilmar has gained 3.3 percent this year, rebounding after three straight year’s of declines.
Profit excluding non-operating items in the quarter was $390.9 million. That compares with the $354.8 million average estimate of three analysts surveyed by Bloomberg. Today’s results include a $24 million gain from selling a stake in Fortune Gas Investment Holdings Ltd., Wilmar said.
Pretax profit at Wilmar’s sugar unit rose 49 percent to $151.2 million, it said today. The company sold 3.4 million metric tons of sugar in the quarter as favorable weather in Australia allowed it to crush more cane.
Earnings before tax at its consumer-product division climbed 20 percent to $58.3 million, while its palm and laurics unit posted a 17 percent gain in pretax profit to $211.9 million.
Pretax net at its plantations’ unit fell 50 percent to $57.9 million and palm fruit production declined 10 percent in the quarter.