Wilmar’s Q3 net profit plummets 34.7% YoY to US$275.9m

US$78.9m market-to-market losses are to blame.

Wilmar’s net profit plummeted 34.7% YoY to US$275.9m in Q3, according to a report by OCBC. The company cites market-to-market losses of US$78.9m in investment securities due to weaker equity markets as the cause of the decline. Excluding one-off items places core earnings at approximately US$359m, reflecting a 16.5% decline.

While 9m15 net profit revealed a 4.8% dip to US$718.9m, core earnings inched up 1.1% to US$816m.

On the plus side, Wilmar notes that effective hedging hampered significant foreign exchange losses even as regional currencies such as the Malaysian Ringgit, Indonesian Rupiah, and Chinese Renminbi depreciated.

Meanwhile, the group’s short-term debt stood at US$12.09b. Wilmar’s cash, bank and structured deposits, marketable securities, receivables and inventories amount to US$15.7b. Further, the company has US$2.34b committed undrawn credit facilities out of total unused credit facilities of US$16.33b. As such, Wilmar reports it is confident that it does not foresee any problem in meeting mature short-term debts.

“The Group expects performance of the Oilseeds & Grains segment to remain satisfactory. Refining and downstream product margins for the Tropical Oils segment should also improve with the biodiesel mandate in Indonesia. The recent increase in CPO prices will improve Plantation margins. In addition, the Group’s Sugar Milling segment will gain from the recent surge in sugar prices on the back of anticipated sugar deficit in the coming year. Overall, we remain optimistic that performance for the remainder of the year will be satisfactory,” affirmed Mr. Kuok Khoon Hong, Chairman and CEO.