MARKET DEVELOPMENT
UPDATE 1-Weak Palm Processing Business Takes Shine off Wilmar's Q3
UPDATE 1-Weak Palm Processing Business Takes Shine off Wilmar's Q3
* Q3 net up 1.5 pct at $422.4 mln, highest since 4Q12
* Palm and laurics unit posts 49 pct fall in pre-tax profit
* Oilseeds, consumer products, plantation units see profit rises (Adds breakdown of profits by segment, comments by company)
12/11/2014 (Reuters) - Wilmar International , the world's largest palm oil processor, posted its highest quarterly net profit in seven quarters on gains in its oilseeds and plantations businesses.
But weak margins at the key palm oil processing unit curbed the third-quarter earnings growth to just 1.5 percent.
Wilmar reported on Tuesday a net profit of $422.4 million for the three months ended Sept. 30 on revenue of $11.5 billion, which was down 2.7 percent compared to the same quarter last year.
The palm and laurics business, its biggest revenue contributor, posted a 49 percent slide in pre-tax profit in the quarter, despite growth in both volume and revenue, due to lower palm oil refining margin on the buildup of refining capacity.
"Compressed margins in palm & laurics will likely persist due to lower production and excess refining capacity in Indonesia," Wilmar said in a statement.
But pre-tax profit of the oilseeds and the grains business shot up 88 percent as soybean processing margins in China <0#JCI-SBCRMRG> improved in the quarter. Wilmar, one of China's largest soybean processors, expected the margins to remain positive in the fourth quarter.
Pre-tax profits of the plantations and palm oil mills business jumped 49 percent, consumer products gained 29 percent and the sugar business rose 4.8 percent for the quarter.
Wilmar, part of Malaysian billionaire Robert Kuok's business empire, has aggressively expanded in recent years into areas such as sugar and consumer products to lower its dependence on palm oil. It is in the process of acquiring Australian food firm Goodman Fielder.
Wilmar's core net profit for the quarter, which excludes non-operating items, rose nearly 10 percent, it said.
The upcoming festive season will help the performance of the rice and flour business, as well as the consumer products unit which has seen good growth outside of China this year, the company said.
"We are optimistic on the prospects for China, India and Indonesia as well as Africa despite the outbreak of Ebola, and will continue to expand our operations in these key growth markets," it said.
Wilmar's shares inched up 0.3 percent on Tuesday, ahead of the release of the results. It has fallen more than 6 percent so far this year, lagging a 4 percent gain for the benchmark Straits Times Index.
* Palm and laurics unit posts 49 pct fall in pre-tax profit
* Oilseeds, consumer products, plantation units see profit rises (Adds breakdown of profits by segment, comments by company)
12/11/2014 (Reuters) - Wilmar International , the world's largest palm oil processor, posted its highest quarterly net profit in seven quarters on gains in its oilseeds and plantations businesses.
But weak margins at the key palm oil processing unit curbed the third-quarter earnings growth to just 1.5 percent.
Wilmar reported on Tuesday a net profit of $422.4 million for the three months ended Sept. 30 on revenue of $11.5 billion, which was down 2.7 percent compared to the same quarter last year.
The palm and laurics business, its biggest revenue contributor, posted a 49 percent slide in pre-tax profit in the quarter, despite growth in both volume and revenue, due to lower palm oil refining margin on the buildup of refining capacity.
"Compressed margins in palm & laurics will likely persist due to lower production and excess refining capacity in Indonesia," Wilmar said in a statement.
But pre-tax profit of the oilseeds and the grains business shot up 88 percent as soybean processing margins in China <0#JCI-SBCRMRG> improved in the quarter. Wilmar, one of China's largest soybean processors, expected the margins to remain positive in the fourth quarter.
Pre-tax profits of the plantations and palm oil mills business jumped 49 percent, consumer products gained 29 percent and the sugar business rose 4.8 percent for the quarter.
Wilmar, part of Malaysian billionaire Robert Kuok's business empire, has aggressively expanded in recent years into areas such as sugar and consumer products to lower its dependence on palm oil. It is in the process of acquiring Australian food firm Goodman Fielder.
Wilmar's core net profit for the quarter, which excludes non-operating items, rose nearly 10 percent, it said.
The upcoming festive season will help the performance of the rice and flour business, as well as the consumer products unit which has seen good growth outside of China this year, the company said.
"We are optimistic on the prospects for China, India and Indonesia as well as Africa despite the outbreak of Ebola, and will continue to expand our operations in these key growth markets," it said.
Wilmar's shares inched up 0.3 percent on Tuesday, ahead of the release of the results. It has fallen more than 6 percent so far this year, lagging a 4 percent gain for the benchmark Straits Times Index.