Singapore / SG. (wi) Wilmar International Limited, Asia’s leading agribusiness group, achieved a 49 percent increase in net profit to 241.2 million USD for the quarter ended March 31, 2015 (Q1/2015). The Group’s core net profit (i.e. excluding non-operating items) grew 23 percent to 263.3 million USD in Q1/2015. The higher net profit in Q1/2015 reflected a strong performance from Oilseeds + Grains (Manufacturing + Consumer Products) as well as higher contributions from associates. However, Tropical Oils (Plantation + Manufacturing) and Sugar (Merchandising, Manufacturing + Consumer Products) saw weaker performances in Q1/2015, amidst tougher operating conditions in their respective markets. Revenue declined eight percent 9.41 billion USD due to lower commodity prices.
Business Segment Performance
Tropical Oils (Plantation + Manufacturing) registered a 44 percent drop in pre-tax profit to 152.1 million USD as a result of lower contributions from both Plantation and Manufacturing businesses. In Q1/2015, production of fresh fruit bunches fell nine percent to 960’319 metric tonnes. Production yield declined seven percent to 4.5 metric tonnes per hectare as the Group’s Malaysian plantations were affected by unfavourable weather conditions. Lower crude palm oil (CPO) prices also contributed to the lower Plantation profit. In addition, refining margins continued to contract on the back of industry overcapacity, tighter CPO supplies and weaker demand for palm products. However, lower feedstock costs helped improve profitability for the Group’s downstream products. Sales volume from Tropical Oils Manufacturing remained flat at 5.6 million metric tonnes in Q1/2015.
Oilseeds + Grains (Manufacturing + Consumer Products) saw pre-tax profit increase from 13.6 million USD in Q1/2014 to 166.1 million USD in Q1/2015. The strong growth was driven by improved crushing margins and better performance in Consumer Products. Crushing margins improved due to lower soybean imports into China by financial traders and lower soybean prices. Lower feedstock costs, together with higher sales volume, contributed to improved margins in Q1/2015. Sales volume for Oilseeds + Grains Manufacturing registered a 13 percent increase to 4.8 million metric tonnes due to higher crushing volume and continued expansion in the Group’s grains operations. Consumer Products sales volume grew three percent to 1.5 million metric tonnes.
Sugar (Merchandising, Manufacturing and Consumer Products) reported a higher pre-tax loss of 68.0 million USD in Q1/2015 compared to a pre-tax loss of 54.0 million USD in Q1/2014. This was due to weaker performances from the Group’s Indonesian refineries and merchandising business as well as seasonal losses in Milling which are typically incurred as a result of plant maintenance in the first half of the year. Sales volume for Sugar increased 28 percent to 1.8 million metric tonnes from higher merchandising activities.
The Others segment recorded a pre-tax profit of 21.9 million USD in Q1/2015 (Q1/2014: pre-tax loss 36.6 million USD) primarily due to positive contributions from both Shipping and Fertiliser businesses and the recovery in investment securities.
Associates contributed 39.2 million USD in Q1/2015 (Q1/2014: 16.2 million USD). This was due to higher contributions from the Group’s associates in India and China.
Strong Balance Sheet
As at March 31, 2015, total assets stood at 42.77 billion USD while shareholders’ funds was 15.47 billion USD. Net gearing ratio improved to 0.73 times from 0.78 times in December 31, 2014.
Kuok Khoon Hong, Chairman and CEO, said, «Crush margins are expected to remain positive going into mid-2015. Consumer Products will continue to grow globally with reasonable margins. Although operating conditions for Tropical Oils will remain challenging, we believe we will be able to overcome the current difficult environment, especially if the Indonesian government implements its proposed support policy for biodiesel. Overall, we are cautiously optimistic that second quarter performance will be satisfactory».