Olam Net Profit Falls Q3 2012, Despite Strong Performance in Food Category

Sales Volume and NC for the Food Staples & Packaged Foods segment rose 26.7% and 27.4% respectively in 9M FY2012. Q3 FY2012 recorded Sales Volume and NC growth at 39.8% and 17.7% respectively.

16 May 2012 --- Olam International Limited, a leading global, integrated supply chain manager and processor of agricultural products and food ingredients, reported Profit After Tax of S$289 million ($227.2) for the nine months ended March 31, 2012 (“9M FY2012”) compared to S$301.7 million ($237.2 million) a year ago.

Olam's January-March net profit declined 22.5 percent to S$98.7 million from a year ago, hurt by lower sales from its industrial raw materials segment, which includes cotton and wood.

Sales Volume and NC for the Food Staples & Packaged Foods segment rose 26.7% and 27.4% respectively in 9M FY2012. Q3 FY2012 recorded Sales Volume and NC growth at 39.8% and 17.7% respectively. The strong volume growth was led by Rice and Grains as these businesses focused on market share growth in Africa. Dairy and Sugar continued to face headwinds and challenging trading conditions during this period.

Olam’s Group CEO, Sunny Verghese commented: “While many of our businesses continued to perform well, we are not entirely immune to the difficulties being experienced in many global markets. This is reflected in the results of some of our operating businesses which are more sensitive to these external events. As a result, the Group’s 9M FY2012 performance has been a tale of two parts. The first part reflects the performance of the Food category which comprises three out of our five reporting segments and accounts for 78.4% of revenue. This category reported strong growth in both volumes and margins for the period”

“The second part reflects the performance of the Non-food category – the Industrial Raw Materials and the Commodity Financial Services (CFS) segments. The IRM segment continued to be impacted during the third quarter of the 2012 financial year, following on from its weak performance in the first half of this year, primarily as a result of the exceptional events that occurred in the Cotton markets. The events relating to the IRM and CFS segments are seen as cyclical rather than structural in nature. We therefore remain positive about the long term earnings potential in these segments and for the Group as a whole.”

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