SINGAPORE— Olam Group has reported a net profit of US$429.1 million for the first half of the fiscal year ended June 2022, up 1.8 per cent from US$421.5 million in the first half of 2021, as higher finance costs partly offset strong earnings before interest and tax growth for the period.

EBIT grew 25.0% to $802.1 million mainly due to the strong earnings contribution from Olam Agri which contributed 75.9% of the total group EBIT, while Olam Food Ingredients (ofi) contributed 33% and the remaining was of Olam Group at -8.9%.

Revenue for the period rose 24.6 per cent on year to US$28.4 billion from US$22.8 billion the previous year, as the group recorded higher prices across several of its products and commodities.

Finance costs, however, expanded 36.7 per cent to US$327.3 million from US$239.4 million previously. Olam attributed this to higher finance costs amid a high interest rate environment, taxes and higher one-off exceptional charges related to the group’s reorganization.

The group believes it is “well-positioned for 2022 as the revised sales pricing and margin recovery gathers pace in H2 2022” and expects to deliver a better year-on-year performance for the full year

Excluding exceptional items, operational profit after tax and non-controlling interest (Patmi) was US$472.5 million, up 8.2 per cent from the previous year.
Olam’s board has declared an interim dividend of 4 Singapore cents per share, unchanged from a year ago.

The group believes it is “well-positioned for 2022 as the revised sales pricing and margin recovery gathers pace in H2 2022” and expects to deliver a better year-on-year performance for the full year.

It further anticipates additional one-off and non-recurring expenses associated with its re-organisation plan in H2, although these expenses for the full year are expected to be lower than the total recorded for 2021.

Olam Co-Founder and Group CEO, Sunny Verghese said: “Our strong operating performance in H1 2022 in a highly volatile geopolitical and macroeconomic environment continues to validate our strategy and the effectiveness of our Re-organisation

Overall, given the 1HFY2022 results and barring any unforeseen circumstances or unfavourable geopolitical, macroeconomic and pandemic developments, Olam is cautiously optimistic about its prospects for the rest of 2022, even as the industry continues to see strong underlying demand amid tight supplies.

Liked this article? Subscribe to Food Business Africa News, our regular email newsletters with the latest news insights from Africa and the World’s food and agro-industry. SUBSCRIBE HERE.