Result Y15 Doc3
Result Y15 Doc3
Result Y15 Doc3
9 Temasek Boulevard
#11-02 Suntec Tower Two
Singapore 038989
telephone 65 63394100
facsimile 65 63399755
Website www.olamonline.com
Regn no. 199504676-H
NEWS RELEASE
OLAM INTERNATIONAL REPORTS PBT OF S$496.7 MILLION (13.4% INCREASE) AND
PATMI OF S$362.6 MILLION (2.2% DECREASE) FOR FY2013
FY2013: Financial Highlights
Sales Volume up 49.5% to 16.0 million metric tonnes; Sales Revenue up 21.7% to
S$20.8 billion, with a 16.9% increase in Net Contribution (NC) to S$1,615.8 million.
Consolidated Financial
Results Ended 30 Jun 2013
FY2013
15.953
20,801.8
1,615.8
496.7
362.6
14.0
Full Year
FY2012
10.675
17,093.8
1,381.8
437.9
370.9
15.4
Fourth Quarter
Change Q4 FY2013 Q4 FY2012 Change
49.5%
4.298
3.456
24.4%
21.7%
6,495.0
5,146.0
26.2%
16.9%
458.7
440.1
4.2%
13.4%
133.7
106.6
25.4%
-2.2%
56.8
109.5
-48.1%
n.m.
9.0
15.4
n.m.
348.6
355.5
-2.0%
47.8
94.1
-49.2%
14.36*
14.96*
-4.0%
2.18**
4.30**
-49.4%
Page 1 of 6
Singapore, August 29, 2013 Olam International Limited (Olam, the Group or the
Company) today reported its full year results for FY2013 with Profit Before Tax (PBT) up
13.4% to S$496.7 million. Profit After Tax and Minority Interest (PATMI) was S$362.6 million
compared to S$370.9 million in FY2012. Excluding exceptional items, PATMI decreased by
2.0% to S$348.6 million, compared to S$355.5 million in FY2012.
For the three months ended June 30, 2013 (Q4 FY2013), PBT grew by 25.4% to S$133.7
million following a 26.2% increase in Sales Revenue and a 24% increase in Sales Volume.
PATMI declined by 48.1% year-on-year to S$56.8 million, which included the impact of higher
tax charges of S$50.6 million recognised in Q4 FY2013 compared to a net tax credit of S$8.2
million in Q4 FY2012.
For the full year FY2013 Sales Revenue increased 21.7% to S$20.80 billion. Sales Volume
was up 49.5% to 16.0 million metric tonnes. Overall, NC (defined as Gross Profit less working
capital interest) rose 16.9% to S$1,615.8 million.
Full year tax charges were up from S$34.1 million in FY2012 to S$105.1 million in FY2013,
primarily due to (a) increased business and PBT contribution from higher tax jurisdictions; (b)
one-off and non-recurring tax charges of S$12.8 million resulting from the sale of the Basmati
rice mill in India and the sale-and-leaseback of almond orchards in the US; and (c) tax credit
received in the previous year.
The Groups Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the
year grew by 18.2% to S$1,171 million versus S$991 million in the previous year. EBITDA
returns on average Invested Capital (IC) remained constant at 11.4%. As highlighted in the
Groups strategy review earlier this year, EBITDA and return on IC are being provided as
underlying indicators of operating cash flow and returns respectively.
The Food category accounted for 87.8% of total Sales Volumes, 77.9% of total Sales Revenue
and 85.3% of total NC for the year. Compared to FY2012, Sales Volume increased by 55.2%
with NC up 14.6%. Sales Volume for the Non-Food category improved by 17.9% and NC
increased by 32.3%, with strong NC growth in the Industrial Raw Materials segment of 47.3%,
partially offset by a decline in NC from the Commodity Financial Services segment.
During the year, the Group generated Operating Cash Flow (before changes in working capital)
of S$1,074 million versus S$894 million in the previous year. Net gearing was 1.93 times, as
compared to 2.20 times at the end of Q3 FY2013 and marginally higher than the 1.81 times in
FY2012.
Page 2 of 6
Olams Group MD & CEO, Sunny Verghese said: Our headline results were dampened
somewhat by the impact of increased tax charges versus last year and challenging market
conditions which emerged in Q4 and affected some parts of our business. Despite this,
underlying performance in most segments was robust overall, reflecting the strength of our
business model and diversification in the sources of earnings across our platforms and
geographies.
We see this as a transition year and we are three months into our strategic plan
implementation. We remain focused on the twin goals of pursuing profitable growth and
sustained cash flow generation, he said.
Segmental Review
Olams Executive Director of Finance and Business Development, A. Shekhar said: We are
pleased with the earnings performance across our segments, especially considering the overall
macroeconomic uncertainty as well as increased volatility in the agri-commodity sector.
We continue to see robust EBITDA growth from the investments that we have already made
and are focused on achieving our targeted returns (EBITDA/Average IC) and free cash flow.
Full Year
Fourth Quarter
FY2013
FY2012
1,641,135
1,570,197
4.5%
556,901
535,813
3.9%
3,205.1
2,562.8
25.1%
1,154.5
847.9
36.2%
418.7
390.9
7.1%
148.7
126.8
17.3%
255
249
2.5%
267
237
12.8%
The Edible Nuts, Spices & Beans segment grew Sales Volume by 4.5% and NC by 7.1%
during FY2013. Edible Nuts contributed to volume and NC growth with the consolidation of the
full year results of Progida Group in Hazelnuts and larger outputs and improved market
conditions in the upstream Almonds business. These improvements were partially offset
however by lower margins from the upstream Peanut business in Argentina due to a steep
decrease in prices. During the year, Edible Nuts completed a sale and leaseback of almond
orchard land in the US and commissioned its A$60 million Almond hulling and processing plant
in Australia. Spices & Vegetable Ingredients onion, spices and garlic dehydrates business
performed well but the tomato processing business performed below par for the year as
margins were under pressure from higher unit costs due to lower capacity utilisation.
Page 3 of 6
Confectionery &
Beverage Ingredients
Sales Volume
(metric tonnes)
Sales Revenue (S$m)
NC (S$m)
NC Per Tonne (S$)
Full Year
FY2013
FY2012
1,612,418
5,273.2
370.7
230
1,608,561
5,902.2
420.8
262
Fourth Quarter
Change Q4 FY2013 Q4 FY2012 Change
0.2%
-10.7%
-11.9%
-12.1%
421,655
1,589.5
105.3
250
342,029
1,305.1
148.3
434
23.3%
21.8%
-29.0%
-42.4%
The Confectionery & Beverage Ingredients segment recorded marginal volume growth of
0.2% in FY2013. NC declined 11.9% mainly due to La Roya (coffee rust disease), which
impacted margins across the Central and South American Coffee operations. Cocoa margins
were also lower against a very strong performance in FY2012. During FY2013, the Coffee
business acquired Spains leading producer of soluble coffee, Seda Solubles, and completed
the capacity expansion of its soluble coffee facility in Vietnam. It also acquired Northern Coffee
Corporation, Zambias largest coffee estate and commenced long-term contract farming of
coffee in Brazil. The Cocoa business acquired the remaining 50.0% equity in USICAM and
made a first move into cocoa upstream by purchasing a 95.0% interest in PT Sumber Daya
Wahana in Indonesia.
Food Staples &
Packaged Foods
Sales Volume
(metric tonnes)
Sales Revenue (S$m)
NC (S$m)
NC Per Tonne (S$)
Full Year
FY2013
FY2012
10,753,605
7,720.9
589.3
55
5,844,984
4,586.4
390.9
67
Fourth Quarter
Change Q4 FY2013 Q4 FY2012 Change
84.0%
68.3%
50.8%
-18.0%
2,659,043
2,346.0
96.9
36
2,069,120
1,533.0
85.2
41
28.5%
53.0%
13.7%
-11.4%
The Food Staples & Packaged Foods segments Sales Volume and NC rose 84.0% and
50.8% respectively in FY2013. The positive contribution to NC per tonne by the Rice and
Packaged Foods businesses was offset by the continued underperformance of the upstream
Dairy business. While Grains and Palm contributed to much higher volumes, the NC per tonne
declined due to lower origination margins for grains in Australia and Ukraine, particularly in Q4
FY2013, as well as lower margins in palm in the upstream investments in SIFCA and in the
core supply chain trading business. Major initiatives in this segment included the proposed sale
of a 25.5% stake in Packaged Foods noodle business to Sanyo Foods and the disposal of the
non-core Basmati rice mill in India to Ebro Foods.
Page 4 of 6
Full Year
Industrial Raw Materials
Sales Volume
(metric tonnes)
Sales Revenue (S$m)
NC (S$m)
NC Per Tonne (S$)
FY2013
FY2012
1,946,307
4,601.1
246.3
127
1,650,839
4,040.8
167.2
101
Fourth Quarter
Change Q4 FY2013 Q4 FY2012 Change
17.9%
13.9%
47.3%
25.0%
660,868
1,404.7
106.3
161
508,699
1,459.6
68.5
135
29.9%
-3.8%
55.1%
19.3%
The Industrial Raw Materials (IRM) segment recorded a Sales Volume growth of 17.9% and a
growth of 47.3% and 25.0% in NC and NC per tonne respectively in FY2013. The Cotton
business registered volume growth vis--vis FY2012, but faced significant margin pressure in
the fourth quarter. Wood Products continued to be impacted by lower demand and is being
restructured to reduce overheads. Trading operations in Rubber and Fertiliser were initiated
during the year, which contributed to volume growth in the segment. The Special Economic
Zone Project had a very good fourth quarter and maintained its performance as compared to
the previous year.
The Commodity Financial Services (CFS) segment reported a loss at NC level of S$9.2
million in FY2013 compared to a gain of S$12.1 million in FY2012 due to overall unfavourable
trading conditions.
Dividend
The Board of Directors recommends a dividend of 4.0 cents per share for the year.
Outlook and Prospects
While the long term trends in the agri-sector remain attractive, the nearer term macroeconomic
uncertainty and increased volatility could impact the sector. The Companys diversified portfolio
with leadership position in many of its segments provides a resilient platform to navigate the
uncertainties in the global markets. The Companys strategy for the plan period from FY2014 to
FY2016 has already been announced and the focus remains on execution and extracting full
value from investments already made and generating positive cash flow.
Mr Shekhar said: The task ahead is to ensure reliable execution against our plans, deliver the
full cash flow potential from these investments, while slowing down the pace of new
investments as announced in our strategy review.
. . . .
Page 5 of 6
Note:
This release should be read and understood only in conjunction with the full text of Olam
International Limiteds FY2013 Financial Statements lodged on SGXNET on August 29, 2013.
About Olam International Limited
Olam International is a leading global integrated supply chain manager and processor of
agricultural products and food ingredients, supplying various products across 16 platforms to
over 13,600 customers worldwide. From a direct presence in more than 65 countries with
sourcing and processing in most major producing countries, Olam has built a global leadership
position in many of its businesses, including Cashew, Spices & Vegetable Ingredients, Cocoa,
Coffee, Rice, Cotton and Wood Products. Headquartered in Singapore and listed on the SGXST on February 11, 2005, Olam currently ranks among the top 50 largest listed companies in
Singapore in terms of market capitalisation and is a component stock in the Straits Times Index
(STI), MSCI Singapore Free, S&P Agribusiness Index and the DAXglobal Agribusiness Index.
Olam is the only Singapore firm to be named in the 2009, 2010 and 2012 Forbes Asia Fabulous
50, an annual list of 50 big-cap and most profitable firms in the region. It is also the first and
only Singapore company to be named in the 2009 lists for the Global Top Companies for
Leaders and the Top Companies for Leaders in the Asia Pacific region by Hewitt Associates,
the RBL Group and Fortune. More information on Olam can be found at www.olamonline.com.
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