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Wilmar International Limited’s Latest Earnings: Solid Gains in Sales and Profit

Yesterday, Wilmar International Limited (SGX: F34) reported its second-quarter earnings. The reporting period was from 1 April 2017 to 30 June 2017.

As Asia’s leading agribusiness group, Wilmar is engaged in a variety of businesses. According to its corporate profile, the company has over 500 manufacturing facilities and a distribution network which spans some 50 countries. These businesses are divided into four main business segments: Tropical Oils, Oilseeds and Grains, Sugar, and Others.

To learn more about Wilmar, head here . You can also catch up with its second earnings report here .

Financial highlights

The following’s a quick take on Wilmar’s second-quarter results:

1. Revenue increased 13.2% to US$10.6 billion.

2. Net profit was US$60.2 million, a turnaround from the loss of US$220.1 million it recorded a year ago

3. Earnings per share (EPS) was US$0.01.  

4. Cash flow from operations was US$432.5 million and capital expenditure at US$194.5 million. Wilmar had free cash flow of US$238 million.

5. As of 30 June 2017, Wilmar had US$1.79 billion in cash and equivalents and US$17.4 billion in borrowings. A year ago, the group had US$1.07 billion in cash and equivalents and US$15.9 billion in debt.

Wilmar posted a double-digit gain in revenue alongside profit. The agribusiness firm also generated strong free cash flow for the quarter. Debt levels, though, moved up compared to a year ago.

The board of directors proposed an interim dividend of S$0.03 per share, up from US$0.025 a year ago.

Operational Highlights

Wilmar’s revenue rose from gains in tropical oils, oilseeds and grains, and sugar. However, profit before tax (PBT) for tropical oils and sugar suffered declines of 68.1% and 35.7% respectively. Gains in the oilseeds and grains segment made up for the losses in the previous two segments, pushing PBT to a positive figure as compared to a year ago.  

For its outlook, Wilmar’s Chairman and Chief Executive Officer, Kuok Khoon Hong, said:

“We expect Tropical Oils to perform better in 2H2017 on the back of improvements in production yields and better margins from downstream operations. Oilseeds crush margins are expected to remain positive for the rest of the year and Consumer Products will improve as it enters its seasonal peak period. However, Sugar will continue to be affected by the volatility in sugar prices.

While the Group may face short term challenges, we remain very optimistic about the tremendous growth prospects of our various businesses and will continue with our expansion plans, especially in China, India and Indonesia.”

Foolish summary

At its closing price yesterday of S$3.42, Wilmar traded at 15.7 times its earnings and had a dividend yield of 2.0%.

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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 Chin Hui Leong doesn’t own shares in any companies mentioned.