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Palm oil weakness drags down Wilmar Q4 earnings

A WEAKER showing in its tropical oils segment, which includes its oil palm plantations, dented earnings for agribusiness group Wilmar International in the fourth quarter.

Net profit for the three months ended Dec 31, 2015, fell 16 per cent from the previous year to US$337.18 million, it said in a Singapore Exchange filing on Thursday.

This came on the back of a 12.5 per cent year-on-year slide in revenue to US$9.43 billion.

Wilmar, one of the largest oil palm plantation owners in Indonesia and Malaysia, said in its statement that its oilseeds and grains division and sugar unit had both seen strong profit growth, but results were "affected by weak performance in tropical oils, in line with difficult industry-wide conditions for the segment".

Though its oil palm plantations reported improved production yields in Q4 2015, they suffered from lower crude palm oil prices, Wilmar said, adding that weak demand and narrower profit margins hurt its downstream operations' earnings.

Group earnings per share for Q4 fell to 5.3 US cents from 6.3 US cents the year before. Net asset value per share stood at US$2.39 as at Dec 31, 2015, down slightly from US$2.42 as at Dec 31, 2014.

The board proposed a final dividend of S$0.055 per share.

Wilmar shares rose S$0.07 to S$3.11 on Thursday before the results were released.

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