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Olam Q3 profit drops 14.2% to S$20.7m

Olam International's office at Marina One, Singapore_preview.jpg
Agri-food business Olam International said third-quarter earnings fell 14.2 per cent to S$20.7 million against a strong year-ago quarter on tough trading conditions in coffee, and lower performance from its peanut business and commodity financial services (CFS).

AGRI-FOOD business Olam International said third-quarter earnings fell 14.2 per cent to S$20.7 million against a strong year-ago quarter on tough trading conditions in coffee, and lower performance from its peanut business and commodity financial services (CFS).

Revenue for the three months to end-September climbed 23.6 per cent to S$8.29 billion from S$6.71 billion a year ago.

No dividend was declared for the period under review.

Noting that "Q3 is a seasonally lower quarter" for Olam, its co-founder and group CEO Sunny Verghese said: "We further refined our portfolio and made targeted investments during the year, including into digital initiatives and sustainability solutions, that will position us to capture future growth.”

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Olam's net gearing improved to 1.38 times at Sept 30, compared to 1.82 times a year ago.

Executive director and group chief operating officer A Shekhar said: “We reduced our gearing and overall net debt with lower finance costs despite higher interest rates, while continuing to diversify our funding sources. Our focus on capital productivity has resulted in delivering S$602.4 million in free cash flow to equity for 9M 2018.”

For the nine months to end-September, Olam saw a 13.6 per cent drop in net profit to S$272.6 million. Revenue rose 15.7 per cent to S$22.02 billion.

Its shares closed up 2.3 per cent at S$1.77 on Tuesday.