Olam's FY2018 profits plummeted 40.1% to $347.87b

It had a large exceptional $149.4m gain recorded in 2017 primarily from the sale of its 50% stake in FEA.

Olam International ended 2018 on a dismal note after its profits crashed 40.1% YoY to $347.87m from $580.74m, an announcement revealed. However, revenue jumped 16% YoY to $30.48b from $26.27b in 2017.

In Q4, profits plunged 71.6% YoY from $265.14m to $75.31m, whilst revenue rose 16.9% YoY to $8.46b from $7.23b in 2017.

Also read: Olam International Q3 profits fell 14.2% to $20.7m

The weak FY2018 profit performance was attributed to to the large exceptional gain of $149.2m recorded in 2017 from the sale of land in the US, as well as the profit on the sale of its 50% stake in Far East Agri (FEA), Olam explained in its financial statement.

“Compared with a strong performance in the previous year, our 2018 performance has been below our expectations amidst tougher than anticipated market conditions, particularly in the second half of the year,” co-founder & group CEO Sunny Verghese said.

Revenue for its edible nuts & spices and confectionary & beverage ingredients segments declined 4% and 12.4% YoY to $4.3b and $7.1b, respectively on the back of lower prices. Its commodity financial services also reported an earnings before interest, tax, depreciation and amortisation (EBITDA) loss of $13.1m in 2018 due to losses from the Fundamental Fund business which closed in Q4 2018.

On the other hand, revenue from its food staples and packaged foods segment soared 48.5% YoY to $14.5b due to higher trading volumes in grains, Olam said. Similarly, revenue from its industrial raw materials, infrastructure and logistics segment rose 16.9% YoY to $4.5b on higher volumes from all businesses.