World Grain - September 2016 - 15

NEWSREVIEW

Struggles in oilseeds leads to loss
at Wilmar International
SINGAPORE - Untimely purchases in
the volatile market contributed to a secondquarter loss for Wilmar International, the
company said on Aug. 11. Wilmar sustained
a net loss for the quarter ended June 30 of
$220.1 million, which compared to a gain
of $193.2 million, or $3 per share, in the
same period of last year.
Revenue for the second quarter was
$9.367 billion, up slightly from $9.284
billion in the same period of last year.
On July 19, Wilmar's board of directors
announced that a net loss of $230 million
was expected in the second quarter due
to challenging operating conditions and
untimely purchases of raw materials,
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Credit Suisse downgraded its rating of
Wilmar International to "underperform"
from "neutral" on July 20. The rating
means the stock's total return is expected
to underperform the relevant benchmark
over the next 12 months.
"Notwithstanding the one-time loss in
the second quarter, the group's integrated
agribusiness model remains intact and
resilient," said Kuok Khoon Hong,
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"The group continues to execute on its
stated growth strategy with emphasis on
downstream businesses and focusing on
high growth Asian and African markets.
Recent developments in joint ventures in
Vietnam and India strengthen the longterm prospects in these countries. Barring
unforeseen circumstances, the group's
performance for the rest of the year is
expected to be satisfactory."
In the second quarter the company's
Oilseeds and Grains segment sustained
a pre-tax loss of $343.8 million, which
compared to a gain of $115.9 million
in the same period of last year. The loss
was attributed to an untimely purchase of
soybeans in a highly volatile market, the
company said. The loss was mitigated by
stable performance from the Consumer
Products business, which is part of the
Oilseeds and Grains segment. Consumer
Products revenue was $1.157 billion,
down 5.3% from $1.222 billion in the
same period of last year. Total sales
volume for Consumer Products was 1.014
million tonnes.
Revenue for the Oilseeds and Grains segment was $2.801 billion, down 6.1% from
$2.984 billion. Sales volume for Manufacturing totaled 5.943 million tonnes.

For more information, see Page 114

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World Grain - September 2016

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