Wilmar's full-year net profit slips 5% to $1.5b

No thanks to the losses in Oilseeds & Grains incurred in Q2.

Agribusiness giant Wilmar International Limited reported a lower net profit for 2016, slipping 5% to US$1.02b ($1.5b) due to losses of US$343.8m in Oilseeds & Grains during the second quarter of the year.

For 4Q16, reported a 70% increase in core net profit of US$589.5m for the quarter, mainly driven by stronger performance across all business segments and aided by the recognition of deferred tax assets of US$142.1m for the Group’s Indonesian operations.

The Tropical Oils and Oilseeds & Grains segments continued their good performance in 4Q16, while the Sugar segment benefited from higher sugar prices and the extension of the season for milling activities in Australia. Together with improved contributions from associates, 4Q16 was the best performing quarter for the year.

Revenue grew 27% to US$11.95b in 4Q16 (4Q2015: US$9.43 billion), mainly due to higher commodity prices and stronger sales volume. For the year ended December 31, 2016, the increase in sales volume, partially offset by lower commodity prices experienced during the first quarter of the year, resulted in a 7% increase in revenue to US$41.40b (FY2015: US$38.78b).

Check out how Wilmar's segments performed in Q4:

Tropical Oils (Plantation, Manufacturing & Merchandising) reported a 94% increase in pre-tax profit to US$184.3 million in 4Q2016 (4Q2015: US$94.8 million). The strong performance was led by the plantation business which benefited from higher crude palm oil (“CPO”) prices during the quarter. This coupled with the consistently robust performance from the downstream businesses throughout the year resulted in the 40% increase in pre-tax profit to US$689.2 million for FY2016 (FY2015: US$491.5 million).

Oilseeds & Grains (Manufacturing & Consumer Products) registered an 8% improvement in pre-tax profit to US$177.9 million in 4Q2016 (4Q2015: US$164.2 million), supported by stable soybean crush margins. For FY2016, pre-tax profit of US$251.1 million (FY2015: US$689.8 million) was affected by losses recognized in the second quarter of the year.

Sugar (Milling, Merchandising, Refining & Consumer Products) reported a 68% increase in pre-tax profit to US$135.9 million in 4Q2016 (4Q2015: US$81.1 million). The milling business delivered an outstanding set of results, helped by higher sugar prices as well as the season extension for milling activities, which led to higher volume of cane crushed. The overall Sugar results included a US$33.5 million impairment charge on the refinery assets in Australia. Excluding this impairment charge in 4Q2016, pre-tax profit for FY2016 improved by 88% to US$158.8 million (FY2015: US$84.3 million).