Olam's FY2019 profits soared 62.2% to $564.16m

Higher contributions from cocoa, grains, and animal feed businesses drove the gains.

Olam International ended the decade on a high note as its profits rallied 62.2% YoY to $564.16m in FY2019 to reverse the 40% decline in FY2018, its SGX filing revealed. Revenue also rose 8.2% YoY to $32.99b over the same from $30.48b in FY2018.

For Q4 2019, profits skyrocketed $316.2% YoY to $313.42m from a dismal $72.31m in Q4 2018. Revenue for the quarter edged up 3.3% YoY to $8.74b from $8.46b a year earlier.

The strong results were attributed to higher contributions from its cocoa, grains and animal feed businesses.

A final dividend of $0.045 per share was recommended, bringing the total dividend for 2019 at $0.8 per share.

The group’s earnings before interest, taxes, depreciation, and amortization (EBITDA) stood at $1.55b in FY2019, 26.6% YoY higher than the $1.24b reported for FY2018. Olam said that all segments reported increases for the period, except for the industrial raw materials, infrastructure, and logistics segment.

Also read: Olam International posts one-time post-tax gain of $72m

Revenue from the food staples and packaged food segment jumped 21.5% YoY to $17.9b as grains trading volumes grew. EBITDA jumped 57.4% YoY to $454.6m.

Meanwhile, the edible nuts and spices segment’s revenue jumped 2.9% to $4.9b on the back of improved sales of nuts; whilst EBITDA was 0.7% higher at $342.4m on improved performance of cashew.

Meanwhile, EBITDA of confectionary and beverage ingredients grew 26.6% to $562.1m as Olam’s cocoa business margins improved, although revenue shrank 6.2% to $6.7b due to lower cocoa volumes and coffee prices.

The commodity and financial service segment reported an EBITDA of $19m to reverse a $13.1m loss in FY2018.

In contrast, revenue of industrial raw materials, infrastructure and logistics decreased by 6.3% YoY to $4.2b, and EBITDA dropped 1.5% YoY to $173.6m, due to lower sales volumes and lower cotton prices.

The group expressed confidence that they will be able to weather any short-term volatility caused by the COVID-19 outbreak.

“Building on our new Strategic Plan, we recently announced our plan to re-organise Olam into two new coherent operating groups – Olam Food Ingredients (OFI) and Olam Global Agri (OGA) to unlock and maximise the Company’s long-term value,” added Sunny Verghese, Olam’s CEO and co-founder.

Also read: Olam restructures into two new operating groups

Olam will begin to report their financial results at a half-yearly basis following listing rule amendments.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia