Wilmar International has posted net profit of US$302.9 million ($411.98 million) for 1QFY2024 ended March 31, 22.6% lower y-o-y. Core net profit fell 14.0% y-o-y to US$328.4 million during the period.
During the quarter, revenue fell 7.3% y-o-y to US$15.68 billion; while ebitda fell 6.1% y-o-y to US$911.4 million.
Sales volume for food products segment grew by 13.9% y-o-y while sales volume for feed and industrial products segment grew 7.0% y-o-y in 1QFY2024.
Nevertheless, as most commodity prices have declined since 1QFY2023, overall revenue recognised by the group decreased by 7.3% y-o-y for the quarter, says the group on April 29.
The decline in commodity prices led to lower raw material cost for the food products segment, improving overall profits for the segment in 1QFY2024.
However, weaker performance from the group’s sugar merchandising division lowered profits for the feed and industrial products segment in the current period, while the tropical oils and crushing businesses remained challenging, says the group.
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Share of profits from joint ventures and associates was also reduced during the quarter, mainly due to the group’s investments in China. These led core net profit for the group to be lower at US$328.4 million in 1QFY2024, down from US$381.9 million this time last year.
The seasonal reduction in overall inventory balance and continued softening of most commodity prices led to lower working capital requirements for the group, reducing net debt to US$16.28 billion as of March 31, down from US$17.65 billion at end-2023.
Consequently, net gearing ratio for the group improved to 0.81x as of March 31, down from 0.88x at end-2023.
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The group says it generated “stable” cash flows from operating activities of US$1.79 billion for the quarter, with free cash flow amounting to USS$1.34 billion.
As at March 31, the group had unutilised banking facilities amounting to US$34.03 billion. Shareholders’ fund was marginally lower at US$20.09 billion, down from US$20.17 billion as at end-2023. The group blames a strengthening US dollar, which led to lower translation reserves.
“Despite the challenges faced across most of our businesses during the quarter, results for 1QFY2024 are satisfactory”, says the group. “The global economic outlook is expected to remain uncertain throughout 2024 and we foresee the difficult operating conditions to continue into the year. Nevertheless, with our diversified and integrated business model, we expect results for the rest of the year to remain satisfactory.”
Shares in WIlmar closed 13 cents lower, or 3.75% down, at $3.34 on April 29.
