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Palm oil firm Wilmar Q2 net triples, outlook cloudy

Reuters - Friday, August 15

By Jennifer Tan

SINGAPORE, Aug 14 - Wilmar <WLIL.SI>, the world's largest listed palm oil firm, said on Thursday its quarterly net profit more than tripled on high palm oil prices, but warned of moderating prices and a more challenging environment ahead.

Singapore-headquartered Wilmar International Ltd said easing demand for palm oil due to a slowing global economy, coupled with ample supply from Malaysia and Indonesia, would keep prices subdued for the rest of the year.

It is still optimistic its full-year performance will be "satisfactory", helped by a strong showing from its China operations, the company said in a statement.

Commodity prices, including palm oil, have been falling since early July. Malaysia's benchmark contract <KPOc3> for palm oil futures was quoted at 2,620 ringgit per tonne on Thursday, down 42 percent since a record 4,486 ringgit a tonne in March.

Wilmar, which owns oil palm plantations and runs milling, crushing, refining and processing plants in Indonesia and Malaysia, earned $331.7 million in the April-June quarter, compared with $101.5 million a year ago, thanks to improved margins and buoyant palm oil prices.

The company made its trading debut in Singapore in August 2006 following a reverse takeover of Ezyhealth Asia Pacific.

Last year, it completed the purchase of the palm plantation and edible oils businesses belonging to Malaysia's Kuok Group, a move which doubled its plantation landbank to about 570,000 hectares .

Revenue in the second quarter more than doubled to $7.83 billion.

On Tuesday, Singapore-listed peer Golden Agri <GAGR.SI> reported its quarterly net profit more than doubled to $582.2 million on historically high crude palm oil prices.

Shares in Wilmar, valued at about $19 billion, gained 21 percent in April-June, outperforming a 2 percent drop in the benchmark Straits Times Index <.FTSTI>.

Wilmar is expected to post a net profit of $1.06 billion for calendar-year 2008, against $580.4 million in 2007, according to 13 analysts polled by Reuters Estimates before the quarterly results.

Wilmar trades at about 16.5 times forecast earnings, compared with 7 times for Golden Agri and 11.9 times for Sime Darby <SIME.KL>, Malaysia's largest palm oil planter, Reuters data showed.

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