Wilmar rises after profit beats estimates on move to sugar, food

[TOKYO] Wilmar International Ltd shares surged to the highest in more than six months after the company's diversification outside of the mainstay palm oil business helped it beat 2014 profit estimates.

The shares advanced as much as 3.4 per cent to S$3.33, the most in more than 17 months, and traded at S$3.29 as of 11.45am in Singapore. The world's biggest trader of the edible oil, which reported fourth-quarter profit after the market closed yesterday, also announced what Barclays Plc. said was a higher- than-expected dividend for 2014.

The sugar business, which Wilmar entered in 2010, posted record sales from merchandising, and the company's consumer products unit saw record profit for the year on growth outside of China, Barclays said in a report dated yesterday. Wilmar is also beating peers on margins in oil processing, the bank said.

Faced with an already dominant market position in China's cooking oil market, one of the world's most regulated, Wilmar has moved into sugar, noodles, and even real estate in the last three years as it searches for growth and defenses against price volatility in crude palm oil.

The oil, the world's most-used in food as well as in soap, cosmetics and fuelis up about 20 pe rcent from a five-year low in September.

Pretax profit at one of Wilmar's main units, plantations and oil mills, saw an 11 per cent decline to US$77.2 million on lower prices and output in the quarter ended Dec 31.

In the same period, pretax profit at the consumer products division increased 5 percent to US$78.2 million and sugar profits more than doubled to US$53.6 million, the company said.

Total net income rose 8.7 per cent to US$401.2 million in the fourth quarter of last year from a year earlier, company said in a statement yesterday. The mean of four analyst estimates compiled by Bloomberg was US$379 million.

"As a whole, our integrated business model should enable stable and resilient earnings in 2015," Wilmar Chief Executive Officer Kuok Khoon Hong said in the statement.

BLOOMBERG