Singapore “Flyer” of the Week: Olam International

Olam-logoWe don’t often see a blue-chip company that is part of the Straits Times Index (SGX: ^STI) being featured as Singapore “Flyer” of the Week, but this week we see commodity firm, Olam International Limited (SGX: O32), flying close to 9% to close at S$1.71 on Thursday.

The company released its second quarter results on Valentine’s Day. Revenue for the quarter fell 8% to S$4.5 billion while net profit slumped 12.5% to S$134.9 million, both year-on-year. The decline in net profit was mainly due a 169.5% plunge in net gain from changes in fair value of biological assets.

For the half year, revenue went down 5.3% to S$8.8 billion while net profit declined 8.5% to S$ 180.5million.

As of 31st December 2013, net gearing for Olam was at 2.06 times, which was lower than the 2.21 times gearing seen in the previous year. Olam made an improvement in this department.

Net cash of S$271.2 million was used in operations for the half year while in the previous year, S$518.5 million of net cash was used. Even though it used lesser cash this year as compared to last year, it is still generating negative cash flow from operations. Cash flow is the lifeblood of any company.

Currently, Olam is trading at a historical PE of close to 12 and sports a dividend yield of 2%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.