23/02/2012 (Reuters) - Wilmar International Ltd posted a 57 percent jump in quarterly profit, boosted by a huge revaluation gain in its core palm oil business and from its enlarged sugar operations, but investors dumped shares on concerns about declining margins.

Singapore-listed Wilmar, the world's largest listed palm oil firm, reported net profit of $500 million for the three months ended December, up from $318.6 million a year ago, helped by a $263 million gain from the revaluation of palm oil plantations.

But the results disappointed analysts as earnings from its consumer products and palm oil businesses both fell by 12 percent despite higher sales and palm oil production volumes.

Macquarie Securities said Wilmar's net profit excluding one-off items was 44 percent below its forecast and "a big disappointment".

Wilmar's fourth quarter 2010 results included a revaluation gain of $251 million, so its net profit for the three months excluding non-operational and other one-off items actually tripled to $264.5 million.

"The palm and laurics division did not do well in the fourth quarter, largely due to the European financial crisis. The refining margins for its refineries in places like China and Malaysia also took quite a big hit," said Nicholas Low, an analyst at Phillip Securities.

Wilmar shares were down 8.2 percent at S$5.38 at 0339 GMT, after having fallen as much as 9.4 percent earlier in the session -- the largest intra-day drop in four months.

Agricultural companies have come under pressure from volatile global markets and poor processing margins. Industry giants Cargill and Archer Daniels Midland Co recently announced job cuts.

Wilmar said its consumer products business in China, which includes cooking oil, flour and rice, raised selling prices last year but margins fell as input costs rose at a faster pace.

Profits also fell at its plantations and palm oil mills business as a result of lower palm oil prices and higher unit production costs, even though production of fresh fruit bunches increased by 16 percent.

Wilmar is looking to expand, however, and CEO Kuok Khoon Hong said the firm is exploring closer collaboration with various parties to meet the growing global demand for agricultural products.

The Singapore-based firm said earlier on Wednesday it had signed a memorandum of understanding with Archer Daniels Midland Co to work together in areas such global fertilizer purchasing, freight and tropical oils refining.

"We are well positioned to capture emerging markets growth as well as other agri-related expansion opportunities which might arise," Kuok said in a statement.