Olam Group expects lower PATMI in H1

This is due to a lower almond crop yield and higher interest costs.

Olam Group said it expects a “materially lower” reported profit after tax and minority interest in the first half of the year compared to the same period last year to reach $83m, post-tax due to the “unprecedented” and lower crop yield in its almond orchards in Australia.

In profit guidance, Olam added that the expected profit decline will also be driven by the impact of higher interest costs, a large part of which is being recovered through the rise in selling prices although with a lag.

Australia’s almond industry experienced a decline in crop yield in the 2022 and 2023 growing seasons, with Olam citing the observed lower bee activity during pollination due to disease and unseasonal cold, and wet conditions because of excessive rain and flooding.

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“With the Group having completed the harvest and partial processing of the crop by mid-July, it estimates the final yields to be 35% to 40% lower than forecast,” the Group said.

“The Group would therefore expect to record a net exceptional one-off, non-recurring charge of approximately US$83 million on a post-tax basis (PATMI) in its financial statements for H1 2023, subject to finalisation and approval by the Board of the H1 2023 Group results,” it added.

Despite this, the Group expects its overall net profit to remain positive during the period and the whole year, with the financial results to be released on 11 August.

The Group also advised its shareholders and potential investors to remain cautious in dealing with its securities.