Olam to post one-time net gain of S$72m for Q4 from restructuring initiatives

AGRI-FOOD giant Olam International expects to record a net one-time post-tax gain of about S$72 million for its fourth quarter ended Dec 31.

This comes as the group has executed various restructuring initiatives under its 2019-2024 strategic plan, Olam said on Monday.

During Q4, Olam announced the sale of the real estate assets of its onion and garlic processing facility in California, the sale of permanent water rights in Australia and the divestment of a 10 per cent stake in GSEZ SA, a subsidiary of an associate company. The transactions generated a one-time post-tax capital gain of around S$372 million.

However, Olam will also recognise some S$300 million in one-off exits costs, losses on disposal and/or impairment on other deprioritised assets identified in the strategic plan. These assets include tomato processors in the US; coffee plantations in Zambia, Brazil, Tanzania and Laos; as well as the edible oils processing operations in Mozambique. Olam's board has now completed its review of restructuring and/or divestment actions for these assets.

Therefore, the company will record a net one-time post-tax gain of about S$72 million arising from exceptional or one-off items in its unaudited financial statements for the quarter.

It will release its Q4 results on Feb 28, before trading hours.

Last month, Olam announced that it is reorganising its businesses into two new operating groups with plans to list them. The first operating group will be Olam Food Ingredients, which will consist of the cocoa, coffee, edible nuts, spices and dairy businesses. Meanwhile, Olam Global Agri will comprise the grains and animal feed, edible oils, rice, cotton and commodity financial services businesses.

The company's 2019-2024 strategic plan was announced in January last year.

Olam shares were trading at S$1.80, down three Singapore cents or 1.6 per cent, as at 9.37am on Monday after the announcement.