Cooking oil from the palm-oil group, Wilmar International.

16/02/2015 (The Straits Times) - Commodities firm Wilmar International saw its full-year earnings drop about 12 per cent last year to US$1.16 billion (S$1.58 billion), on the back of lower margins from certain key business segments.

The decline in net profit was primarily due to "margin contraction" in its palm and laurics segment during the first nine months of the year, as well as lower soya-bean crushing margins, said Wilmar International in a statement yesterday.

Revenue dipped slightly by 2.3 per cent at US$43.1 billion, compared with the US$44.1 billion previously.

The group's financial performance for the fourth quarter of last year, however, presented a rosier picture.

Net profit rose about 9 per cent to US$401.2 million for the quarter ended Dec 31, thanks to "improved performances in most key segments as well as higher contributions from associates".

Wilmar International's palm and laurics segment saw higher returns from its downstream business, while other segments such as consumer products, sugar and oilseeds and grains also contributed positively.

Its plantations and palm oil mills segment was affected by lower production and softer crude palm oil prices.

Still, revenue for the three months ended Dec 31 fell 7.3 per cent to US$10.8 billion, compared with the same period a year earlier.

While contributions from the group's associates more than doubled to US$35.8 million in the fourth quarter, the higher gains were not sufficient to offset lower contributions in the first nine months of the year.

This resulted in a lower overall contribution from associates last year at US$80.7 million, down from US$103.8 million the previous year.

Full-year earnings per share was 18.1 US cents, down from 20.6 US cents in 2013.

Net asset value per share was US$2.42 as at Dec 31, up from US$2.35 a year earlier.

Wilmar has proposed a final tax-exempt dividend of 5.5 Singapore cents per share.

Chairman and chief executive Kuok Khoon Hong acknowledged that lower prices for palm, crude oil and sugar will "negatively impact our plantation, palm biodiesel and sugar milling segments".

But he also noted that the group's processing and downstream businesses should benefit from lower feedstock costs, "providing a further boost to the trend of stable volume growth and margin expansion experienced in our downstream businesses these past few years".

He also expects its biodiesel business to benefit from the recently announced biodiesel policy in Indonesia, which involves a hike in biodiesel subsidies.

"As a whole, our integrated business model should enable stable and resilient earnings in 2015," said Mr Kuok.

Wilmar International shares closed three Singapore cents lower at $3.22 yesterday.