Olam reaps 20% profit growth to $114.9m

Maximised loan terms and slashed borrowing costs boosted earnings.

Olam was successful in optimising loan tenures and cutting down on borrowing costs to help buoy earnings, as profit jumped 20% year-on-year to $114.9m in 2Q16.

According to Olam, this strategy also contributed to achieving bottom line growth through lower finance costs which dipped to $91.7 million from S$101.1 million. This has offset amortisation surge following the purchase of cocoa processing assets from ADM and wheat milling assets in Nigeria.

Despite uninspiring turnouts from edible nuts, spices and vegetable ingredients segments, sales volumes in all segments were up 19.9%.

For 1H16, Olam achieved a lush 73% increase in net profit to $228.6 million largely due to lower exceptional losses from buying back higher priced bonds in 1H16 and 1H15, Olam said.

“Sales volumes increased 15.4% as all segments except edible nuts, spices & vegetable ingredients registered higher volumes. Revenues grew 6.7% year-on-year as lower prices of some commodities offset the impact of higher volumes,” the group added.