Wilmar’s net profit up 14.1% to US$393.1m in 2Q11

Wilmar International Limited reported its 2Q11 results this morning, with revenue rising 56.2% YoY and 10.8% QoQ to US$10,560.8m, aided by higher prices of agricultural commodities and also contribution from its Sugar segment. However, it noted that the combined bulk sales volume of Palm and Laurics and Oilseeds and Grains was lower due to uncertainties in the global economy, some demand rationing at higher price levels and a difficult operating environment in China. Margins were also weaker across the board, with gross easing to 9.3% from 10.5% in 1Q11; EBITDA eased to 3.7% from 4.1%; and net margin to 3.7% from 4.1%, respectively.

Nevertheless, net profit rose 14.1% YoY and 1.7% QoQ to US$393.1m. 1H revenue also grew 48.6% to US$20,096.5m, meeting 55.9% of our FY11 forecast, while net profit rose by a smaller 4.5% to US$779.8m, meeting 45.9% of our full-year estimate. WIL declared an interim dividend of S$0.03, versus S$0.032 in 1H10. We will be meeting with management later to get an update.