Olam Int'l swings to Q4 loss on fair value charge on sweeteners business

COMMODITIES firm Olam International on Monday swung into a net loss for the fourth quarter, dragged mainly by a change in fair value presentation of its investment in a producer of sweeteners, and a restructuring of its dairy-business unit.

Net loss for the three months ended Dec 30, 2015 stood at S$221 million, compared to a net profit of S$119 million in the year-ago period.

Olam said the net loss was due to the change in the presentation of fair value on its equity investment in Malaysia-based sweeteners producer PureCircle Ltd (PCL) and NZFSU (New Zealand Farming Systems Uruguay) dairy restructuring and herd revaluation expenses.

Olam said it was advised by auditors that given "the significant and prolonged decline in the share price of PCL", it would be prudent to present the non-cash fair value change of S$192.6 million previously recorded under the comprehensive income statement, in the profit-and-loss statement instead. "The company continues to believe in the long-term strategy, competitive position and growth prospects of PCL," it added.

Olam was also hit by one-time transaction expenses of the ADM Cocoa acquisition and the buyback of convertible bonds, thought this was partly offset by the gain on sale-and-leaseback of palm plantations in Gabon.

Revenue rose 11.7 per cent to S$5.44 billion.