Olam's Q1 FY2015 net profit dips 2.9%

OLAM International on Friday posted a 2.9 per cent decrease year on year in net profit to S$44.29 million for the first quarter ended Sept 30.

Sales were nearly flat at S$4.3 billion as lower volumes were offset by an increase in commodity prices. Overall sales volume declined by 14.6 per cent, impacted by reduced volumes from lower margin businesses that were discontinued or restructured.

Earnings per share came to 1.64 Singapore cents, down slightly from 1.71 cents.

During the quarter under review, there was a reduction in fair value of biological assets from a gain of S$3.32 million in Q1 FY2014 to a loss of S$15.91 million. The reduction was largely due to a lower net fair value of its Australian almond plantation assets as they have achieved peak maturity in most of the estates.

Operational profit after taxes and minority interests (Patmi), excluding a net exceptional gain, declined by 29.4 per cent to S$32.2 million. Q1 FY2015 results included net exceptional gains of S$12.1 million from the sale of its dairy processing facility in Côte d'Ivoire.

Net gearing stood at 1.85 times at Sept 30, which was marginally higher than 1.82 times as at June 30, but in line with its FY2016 objective of operating below 2.0 times.

Olam's chief executive Sunny Verghese said: "We continue to invest selectively in platforms prioritised for growth and we are confident that our investments, many of which are still in gestation, will be significant contributors going forward."