Olam Int'l sees Africa as a future cash cow

Find out more plans as the company comes to business as usual with its new CFO.

According to OCBC Investment REsearch, Olam International Limited (Olam) recently held a luncheon for analysts to meet Shekhar Anantharaman who has just moved into a new and enhanced role as Executive Director – Finance and Business.

This development came after the resignation of CFO Krishnan Ravi Kumar, who is leaving for new opportunities outside the agri- commodity sector.

As part of Shekhar’s expanded role, he will lead the group’s overall strategy and new business development activities, as well as overseeing Olam’s corporate finance & accounts, and investor relations.

OCBC said they had the opportunity to meet with several members of Olam’s finance team, most of whom have been with Olam for many years.

Thus, OCBC believes  that it should be “business as usual” for the company, where management remains confident of achieving its target of recording US$1b net profit by FY16.

Moreover, Olam added it is likely to focus its future growth on markets like Africa, but is understandably less keen on Europe at the moment, said OCBC.

More insight on share buybacks

According to OCBC, the Management also shared more insights on its share buyback scheme, which has a mandate to buy back up to 10% of its outstanding shares.

To date, Olam has bought back ~52.2m shares, or 2.1% of outstanding shares, after its last purchase of 4.7m shares at an average price of S$1.86 on 26 Jun.

Management revealed that it will continue to buy back shares as long as the implied return to existing shareholders is higher than the expected IRR of any new projects, said OCBC.