SINGAPORE (Aug 14): Olam International reported 2Q19 earnings of $61.5 million, or 1.49 cents per share, down 34.5% from a year ago.
The weaker bottomline came on the back of higher cost of goods sold, depreciation and finance costs and exceptional losses.
Revenue for 2Q19 from goods and services rose 15.7% to $8.6 billion while other income rose 22.6% to $8.5 million but cost of goods rose 19% to $7.9 billion.
EBITDA grew by 14.1% to $351.2 million due to higher contribution from all segments except edible nuts and spices, and confectionery and beverage ingredients.
Depreciation & amortisation and finance costs increased to $124.8 million and $187.7 million respectively.
There was also a net exceptional losses of $5.5 million from one-off costs after the closure of the sugar, rubber and fertiliser trading desks, fundamental fund, wood products business in Latin America, as well as the sale of the peanut shelling and farming business in Argentina and the remaining stake in Collymongle gin in Australia.
Olam adopted the new accounting standard SFRS(I) 16 from Jan 1. This had a net impact of negative $6.6 million on the 2Q19's bottomline.
Excluding exceptional losses and the impact of the new accounting standard, 2Q19 net profit would have fallen about 21.7% to $73.6 million instead, Olam said.
PATMI declined 34.5% to $61.5 million.
For 1H19, Olam reported an 8.5% drop in earnings to $230 million despite revenue rising 16.2% to $15.9 billion.
Olam’s board of directors have declared interim dividend of 3.5 cents per share for 1H19.
In its outlook statement, Olam expects its diversified and well-balanced portfolio provides a resilient platform to navigate the challenges in both the global economy and commodity markets, even as political and economic uncertainties are likely to affect global trading conditions in 2019.
Shares in Olam closed 2 cents lower at $1.93 on Tuesday.
