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3 Things Investors Should Know From Wilmar International Limited’s Latest Earnings

Wilmar International Limited (SGX: F34) is an agricultural company that operates through four segments: Tropical Oils; Oilseeds and Grains; Sugar; and Others.

Two weeks ago, the company reported its 2017 third quarter earnings. Let’s look at three useful pieces of information investors may want to know from the announcement:

1. The overall result

The following table shows the results of Wilmar for the reporting quarter:


Source: Wilmar 2017 third quarter earnings announcement

As you can see, Wilmar’s performance was mixed. Revenue inched up higher, but net profit and core net profit both fell. The lower bottom-line was driven primarily by weaker performances in the Tropical Oils and Sugar segments, which were offset partially by growth in the Oilseeds and Grains segment.

2. Segmental revenue performance

The table below shows the revenue performance for each of Wilmar’s business segments in 2017’s third quarter:


Source: Wilmar 2017 third quarter earnings announcement

The lower revenue in the Tropical Oils segment was due to lower sales volume that resulted from a lower biodiesel quota awarded in Indonesia. Meanwhile, declines in milling and merchandising activities in the quarter contributed to the fall in revenue experienced by the Sugar segment.

Oilseeds and Grains reported higher revenue because of higher sales volume from its manufacturing and consumer products sub-segments.

After reviewing Wilmar’s revenue breakdown by business segments, let’s have an overview of the company’s pre-tax profit breakdown.

3. Segmental profit performance

The table below shows the profit performance for each of Wilmar’s business segments in 2017’s third quarter:


Source: Wilmar 2017 third quarter earnings announcement

Profitability at the Tropical Oils segment was impacted by lower processing margins and a fall in sales volume. Similarly, the Sugar segment’s pre-tax profit was dragged lower due to the lower sales volume experienced.

On the other hand, growth in profit for the Oilseeds and Grains segment was driven mainly by its aforementioned growth in sales volume.

The Others segment posted higher pre-tax profit because of higher dividend income received from Wilmar’s investments portfolio and gains from investment securities. Wilmar’s associates in India, Eastern Europe, and Morocco brought in higher pre-tax profits in the reporting quarter.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.