Olam’s net profit falls by 30% to $31m in 3Q

Spoiled by its curdling dairy operations.

The agribusiness company’s food staples and packaged foods segment proved to be the fly in the ointment for its earnings, essentially ruining what would have been a stellar quarter for Olam.

According to analysts from OCBC, all of Olam’s segments registered growth except the food staples and packaged foods segments, which was bombarded by lower volumes, prices, and overall disappointment stemming from its upstream dairy operations.

“And because of this, EBITDA slipped 18% to S$184.0m, while reported net profit tumbled 30% to S$31.0m; operational NPAT rose 6% to S$34.2m,” OCBC said.

Meanwhile, Olam is not one to slack off in a crisis, as OCBC says it is restructuring its dairy farming business in Uruguay, expecting to book a one-off restructuring cost in 4Q.

“Meanwhile, the Industrial Raw Materials segment continued to see lower volumes, mainly due to lower Fertilizer trading, cotton and wood Products volumes; while the SEZ business continues to be a drag on EBITDA,” OCBC added.