Wilmar's core net profit up 22.5% to $435.19m in Q1

It came on the back of strong performances from consumer products.

Wilmar International saw its core net profit jumped 22.5% YoY to $435.19m (US$306.54m) in Q1 from $355.38m (US$250.32m) in 2019, a local bourse filing revealed. This is despite posting revenue that inched up 4.6% to $15.5b (US$10.92b) from $14.82b (US$10.44b) over the same period.

On the other hand, net profit fell 12.7% YoY to $224m in Q1 from $256.92m in Q1 2019.

The growth in the group’s core net profit improved on the back of strong performances from consumer products, especially in China, and tropical oils downstream operations. However, this was partially offset by lower demand from the hotel/restaurant/catering (HORECA) businesses, which was negatively impacted by lockdowns in all major markets.

Sales volume for consumer products grew by 34.8% to 2.9 million MT in Q1, mainly from increased demand for the group’s consumer staples such as rice, flour and cooking oil. However, the group saw a 20% reduction in demand on its medium pack and bulk products, which are mainly for HORECA and food processing industries, as less people dined out.

Wilmar also stated that the recovery from the African Swine Fever outbreak in China led to an overall improvement in both crush margins and volume for the quarter. Total sales volume for oilseeds and grains improved by 17.3% to 4.3 million MT in Q1, whilst tropical oils sales volume slipped due to the slowdown in certain destination markets.

Shareholders’ funds have reduced marginally by 1.4% to $23.5b (US$16.52b) mainly due to balance sheet translation losses with the appreciation of the US dollar during the same quarter.

Meanwhile, net profit dipped 12.7% YoY to $318.48m (US$224.3m) as weak equity markets resulted in mark-to-market losses on the group’s investment securities.

EBITDA for the group improved by 9.6% to $1b (US$707.5m) in Q1. The group generated strong positive cash flow of $2.75b (US$1.94b) from operating activities on the back of better operating profit and lower working capital requirements, as commodity prices declined during the quarter.