SINGAPORE – Global International company, Olam International earnings declined 14.2% to US$15.05 million (S$20.7 million) in the third quarter on tough trading conditions in coffee, and lower performance from peanut business.
During the period, revenue declined by 4.2% in the edible nuts, spices and vegetable ingredients (SVI) segment, hurt by lower peanut sales.
Profit in this segment fell by 18.3% to US$165.10 million compared with strong performance in 2017.
These were impacted by the peanut businesses in Argentina and the US, which offset the improved performance by SVI, excluding tomato processing.
According to the company, revenues for food staples and packaged foods increased by 60.9% to US$7.41 billion on significant volume growth driven by higher Grains trading volumes.
However, EBITDA declined 14.6% to US4180.91 million attributed to lower contribution from Edible Oils, Sugar and Dairy, which offset the improved results from Grains and Packaged Foods.
Confectionery & Beverage Ingredient saw 15.4% decrease in revenue on lower volumes and lower coffee prices.
EBITDA improved 12.1% as strong performance in the Cocoa supply chain and processing compensated for weaker results from Coffee, which continued to face difficult market conditions.
“Our Q3 is a seasonally lower quarter which was further impacted by ongoing tough trading conditions in Coffee, lower performance from the peanut business and the Commodity Financial Services business.
“We further refined our portfolio and made targeted investments during the year, including into digital initiatives and sustainability solutions, that will position us to capture future growth,” said Co-Founder & Group CEO, Sunny Verghese.
Looking into the future, Olam is seeking to utilize its diversified and well-balanced portfolio to enhance a resilient platform to navigate the challenges in both the global economy and commodity markets.
This is given heightened political and economic uncertainties in global markets.
The company said it will continue to execute on its 2016-2018 Strategic Plan for the rest of 2018 and focus on growing its prioritised platforms.
Executive Director and Group COO, A. Shekhar said: “Our proactive efforts to strengthen our financial position and capital structure have supported our performance.
We reduced our gearing and overall net debt with lower finance costs despite higher interest rates, while continuing to diversify our funding sources.”