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Olam posts 1.5% dip in Q3 net profit to S$20.4m

AGRI and food giant Olam International's net profit fell marginally by 1.5 per cent to S$20.4 milllion for the third quarter ended Sept 30, from S$20.7 million a year ago.

This was due to higher net finance cost, depreciation and amortisation arising from the adoption of the new accounting standard SFRS(I) 16 with effect from Jan 1. 

Excluding exceptional losses and the impact of the new accounting standard, net profit for the quarter would have grown 30.4 per cent to S$27 million, said Olam in a press statement.

Revenue increased 0.2 per cent to S$8.3 billion for the three months to Sept 30. 

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Earnings per share was 0.20 Singapore cent for the quarter, unchanged from the year-ago period. No dividend was declared for the period under review.

For the nine months to end-September, net profit fell 8 per cent year-on-year to S$250.7 million. On the other hand, revenue saw a 10.2 per cent increase to S$24.3 billion on the back of improvement in the edible nut and spices businesses, growth in grains trading volumes and higher cotton sales volumes. 

The confectionery and beverage ingredients segment was the only one that saw a decline in revenue due to lower coffee prices and lower cocoa volumes. 

Executive director and group chief operating officer, A Shekhar, said: "We maintained a robust balance sheet in 9M 2019, optimising working capital to deliver stronger free cash flows.

"Our disciplined efforts in proactively managing our capital structure position us well for the rest of 2019 as we approach the peak procurement season for several of our leading commodities and for high-growth strategic investments."

Olam shares closed up two cents to S$1.84 on Wednesday.