Missing the mark: Olam’s profit plunges 43.9% in Q4 due to exceptional losses

And bio losses hit $3.7m.

Mainboard-listed Olam International failed to accomplish its goal of turning its free cash flow positive by the end of FY14, as its Q4 profit plunged 43.9% o S$31.8m,

The group attributed this to exceptional losses of S$16.7m, compared to exceptional gains of S$9.0
million in Q4 FY2013.

For the full year ended June 30, Olam’s operational profit declined 6.7% to S$325.4m in
compared to S$348.6m in FY2013. Operational PATMI for FY2014 included bio losses of S$3.7m compared to a bio gain of S$92.5 million in FY2013.

“While the operating and free cash flow position improved significantly y-o-y, Olam marginally missed its target of turning FCF positive by end-FY14. It reported a negative FCF of SGD28.7m. Improvements in cash flow was largely driven by release of SGD603.9m cash from completion of 14
strategic initiatives. Three remaining initiatives are likely to release further cash of approximately SGD313.1m in FY15.m,” noted a report from OSK DMG

The company also announced a 5 cent ordinary and 2.5 cents of special Silver Jubilee dividend.

“ While we remain positive on the long-term outlook of soft commodities and refinancing of debt at lower costs, likely changes in the Olam’s strategic direction with Temasek as now the largest shareholder remains the key overhang,” the report added.