Wilmar International net profit to reach up to US$650m in Q3

The third quarter is traditionally the best earning due to seasonally higher output in palm oil.

Wilmar International’s net profit is projected to reach between US$600m to US$650m in the third quarter of 2022, according to CGSCIMB.

In a note, CGSCIMB said its forecast is in line with the US$652m earnings in the previous quarter and is higher than last year’s US$576m and Bloomberg's consensus forecast of US$445m.

“3Q has traditionally been its best earnings quarter, driven by festive demand and seasonally higher palm oil output,” it said.

Sugar profit contribution following the crushing season for sugar cane in Australia from June to November will be accounted for in the third quarter and its tropical oil segment would have benefitted from the waiving of pal oil export levy till end-October in Indonesia and the raising of domestic market obligation to nine times.

READ MORE: Wilmar International’s net profit rises 55.1% YoY to $1.6b in H1 2022

CGS-CIMB also said that Wilmar’s food products segment is also expected to show “sequential earnings improvement” from the declining raw materials costs, whilst its rice and flour consumer product were less affected by the increasing prices as materials are sourced locally.

However, the company’s soybean crush margin is expected to remain pressured due to the average back-to-back soybean crush margin in China  falling to US$36 per tonne in the third quarter from +US$21 per tonne in the second quarter, before improving to the current +US$105 per tonne 

Plantation earnings are expected to have declined quarter-on-quarter during the period due to lower cost-per-order prices.

Wilmar is scheduled to release its third-quarter results on 28 October.