Wilmar earns $457.5 million in Q2

SINGAPORE

Revenue for the quarter ended June rose 18.3 per cent to US$6.76 billion on the back of increased sales volume and higher average selling prices, Wilmar said on Friday.

For the half year ended in June, Wilmar’s net profit declined 5 per cent to US$745.9 million.

Despite the margin pressures, Wilmar, the world’s largest palm oil trader, said it was positive on the prospects of Asian economies, especially China, India and Indonesia, adding it would continue to leverage on its presence in these markets for growth.

In a separate filing on the Singapore Exchange on Friday, Wilmar said its subsidiary, Newbloom, had bought a 20-per-cent stake in Mainboard-listed palm oil producer Kencana Agri for $80.4 million.

To diversify its business, Wilmar is also planning a major expansion into sugar with the proposed acquisition of Sucrogen and the development of sugar production in Indonesia.

Malaysian-based brokerage CIMB said it was maintaining its Neutral rating and target price of $6.50 for Wilmar.

It said it expected stronger earnings for the commodities giant in the second half of this year due to seasonal demand and higher prices for agri-business products.— Singapore-listed Wilmar earned US$344.5 million ($457.5 million) in the second quarter, a 15-per-cent drop from the corresponding period a year earlier, hurt by lower margins and a US$41.7-million write-down in the valuation of its convertible bonds.

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Wilmar International Limited said on Friday that its subsidiary, Newbloom Pte. Ltd, will buy a 20 per cent interest in Kencana Agri Ltd for S$80.36 million.

 

Newbloom will buy 229.61 million shares at 35 cents each from Kencana's major shareholder, Kencana Holdings Pte Ltd.

The investment comprises a subscription of 150 million new shares to be issued by Kencana Agri and a vendor placement of 79.61 million existing shares by Kencana Holdings.

Funding for this investment will be from internal sources of funds and bank borrowings.

Wilmar said the investment will add to its plantation assets and is not expected to have a significant impact on its financial position.

Wilmar in TALKS to acquire stake in Kencana

Commodities firm Kencana Agri said it was in talks with fellow commodities player Wilmar on a possible investment of a minority stake by the latter in Kencana.

Kencana Agri said an announcement would be made as soon as an agreement is reached.

The Kencana investment would add to Wilmar’s recent acquisition streak, as chief executive officer Kuok Khoon Hong buys sugar and oleo-chemical businesses in Australia and Malaysia.

Wilmar is seeking a 20 per cent stake in Kencana,

Kencana has a market value of $349 million.Reuters reported yesterday, citing unidentified people.

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