AGRIBUSINESS group Wilmar International : F34 0% reported a 22.6 per cent drop in net profit to US$302.9 million in the first quarter ended Mar 31, from US$391.4 million in the corresponding year-ago period.

Revenue in Q1 fell 7.3 per cent to US$15.7 billion, from US$16.9 billion in the year-ago quarter, it said in a Monday (Apr 29) bourse filing.

The group recorded increases in sales volume across all its core business segments – with sales volume up 13.9 per cent for food products and 7 per cent for feed and industrial products. However, most commodity prices have declined since Q1 2023, it said.

While this benefited the food products segment as raw material costs were lower, the feed and industrial products segment’s sugar merchandising division recorded weaker performance and lower profits. Meanwhile, the segment’s tropical oils and crushing business “remained challenging”.

Share of profits from joint ventures and associates also declined in Q1, something which Wilmar attributed to its investments in China.

Thus, core net profit for the group decreased to US$328.4 million from Q1 2023’s US$381.9 million. It also recognised non-operating losses from its investment securities.

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With the seasonal reduction in overall inventory balance and continued softening of commodity prices, the group had lower working capital requirements and trimmed its net debt to US$16.3 billion as at end-March, against US$17.7 billion as at end-December last year.

Its net gearing ratio has thus improved to 0.81 times as at Mar 31, compared with 0.88 times in FY2023.

The first-quarter’s results are “satisfactory”, despite challenges faced across most of its businesses, the company said. It flagged that operating conditions will likely remain difficult for the rest of the year amid global economic uncertainty.

“Nevertheless, with our diversified and integrated business model, we expect results for the rest of the year to remain satisfactory.”

Shares of Wilmar International fell S$0.13 or 3.8 per cent to S$3.34 on Monday, prior to the results release.