SINGAPORE – Olam’s reorganization plan announced in 2020 has delivered much-needed growth for the company, driving the company to a record 179 percent growth in profit for the fiscal year 2021.
Profits rose to S$686.4 million (US$504m) on strong operating profit growth and significantly lower exceptional losses compared with the year before.
Full year revenue grew by 31.2 percent to S$47b (US$34.51bn) due to higher prices across most products and commodities in 2021.
For its second half ended Dec 31, 2021, the agri-food giant posted a net profit of $264.9 million (US$194.48m) from a loss of S$87 million (US$63.87m) a year ago.
Olam attributed the exceptional profit to higher operating profit, as well as lower exceptional losses recorded for the period.
Revenue for the second half of the year rose 29 percent to S$24.2 billion (US$17.77m), from S$18.7 billion (US$13.73b) a year ago.
Olam noted that its reorganization plan that split the business into three units namely Olam Food Ingredients (OFI), Olam Global Agri, and Olam International was a key driver to its performance in 2021.
Olam Co-Founder and Group CEO, Sunny Verghese, said: “We had a banner year in 2021 with our strongest Reported and Operational PATMI since Olam was founded despite the continued impacts from Covid-19.
Unit wise, Olam Food Ingredients reported an 18.8% growth in revenue to S$14.6 billion (US$10.72b), driven by growth from the Ingredients & Solutions segment.
EBIT grew strongly at 16.8% to S$875.3 million (US$642.63m), demonstrating a strong recovery from the impact that Covid-19 had on some of its businesses in 2020.
2021 was also a record year for Olam Agri with revenue surging 39.6% to S$31.3 billion (US$22.98b), with all three segments comprising of food, feed and non-food contributing to growth.
EBIT surged by 51.5% to S$752.9 million (US$552.77m) on higher contribution from all segments, including a sharp turnaround from Fibre, Agri-industrials & Ag Services that was impacted by Covid-19 in 2020.
Lastly, Olam International saw revenues marginally drop to S$1.1 billion (US$0.81b), as higher prices helped to offset lower volumes post divestments and closures of de-prioritised assets.
EBIT losses increased to S$205.6 million (US$150.95m) from a loss of S$177.0 million (US$129.95m) in 2020.
Looking forward, Olam noted that the economic outlook and prospects for the group for 2022 remain positive, with the industry continuing to see strong demand and tight commodity supplies amid supply chain disruptions, barring unforeseen circumstances.
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