Wilmar’s net profit drops 12.5% to US$222.4m in Q1

Blame it on a one-off impairment.

Mainboard-listed agribusiness player Wilmar International reported that its core net profit dropped 12.5% to US$222.4 million in the first quarter. The decline was mainly on backk of weaker contributions from joint ventures and associates as well as one-off provisions for impairment of US$22.7 million made during the quarter.

Meanwhile, the group's revenue dropped 4% to US$9.0 billion due to lower commodity prices.

Wilmar's key tropical oils and oilseeds & grains segments booked higher pre-tax profits during the quarter, while its sugar segment booked a smaller pre-tax loss of US$18.2 million.

“We expect the recent improvements in CPO prices to benefit our Plantation business. However, this will be partially offset by lower margins in our downstream businesses due to higher feedstock costs," said Kuok Khoon Hong, Wilmar Chairman and CEO.

"Recent volatility in sugar prices will also have an effect on our Sugar operations. Operating conditions in the second quarter are expected to be challenging," he added.