Singapore, February 14, 2008 – Olam International Limited (“Olam” or the “Group”), a leading global, integrated supply chain manager of agricultural products and food ingredients, today announced a year-on-year 25.4% growth in Net Profit After Tax to S$37.7 million for the second quarter ended December 31, 2007 (“Q2 FY2008”).
H1 FY2008: Financial Highlights
�� Sales Revenue of S$3.32 billion, up 40.4%.
�� Sales Volumes of 2.34 million tonnes, up 28.7% with growth across all four segments.
�� Gross Contribution (GC) up 55.0% to S$305.9 million, with GC/tonne up 20.2% to S$131.
�� NC up 56.3% to S$205.6 million, with NC/tonne up 22.2% to S$88.
�� 60.4% of NC growth on account of volume growth, and 39.6% from margin improvements.
�� NC growth in existing businesses was strong at 30.8% and accounted for 54.7% of Group NC growth.
�� Results of 5 new businesses from acquisitions – Queensland Cotton, Universal Blanchers, Naarden, Key Foods and PT DUS – were consolidated. These acquired businesses accounted for 51.6% of the growth in Group Sales Volume and contributed S$33.6 million or 45.3% of total growth in NC.
�� Net Profit After Tax up 23.1% to S$46.9 million, EPS up 23.2% to 3.03 cents.
* Based on weighted average number of shares of 1,555,467,400 for Q2 FY2008 (compared to weighted average number of shares of 1,554,584,400 for Q2 FY2007).
** Based on weighted average number of shares of 1,555,536,601 for H1 FY2008 (compared to weighted average number of shares of 1,554,584,400 for H1 FY2007).
Interim Net Profit After Tax for the first six months (“H1 FY2008”) amounted to S$46.9 million, a 23.1% growth over the previous corresponding period.
Said Olam’s CFO, Krishnan Ravikumar: “The first-half normally accounts for 30% to 40% of our full year’s earnings due to the seasonality of our business since we are present largely in the northern hemisphere countries where the harvesting season is typically between October and March. Results for the first-half included the consolidated results of five completed acquisitions – Queensland Cotton (QCH), Universal Blanchers (UB), Naarden Agro, Key Foods and PT DUS.
“Our existing businesses continued to perform well,” he added.
Olam’s Group Managing Director and CEO Sunny Verghese said: “Our first-half results show that our growth strategies through identifying adjacencies in our core businesses and making valueaccretive M&A investments are bearing fruit. Over the last three years since we were listed, we have more than doubled our revenues and net profits, and with all of this growth being nondilutive to existing shareholders. We are continuing to build distinctive capabilities in terms of gaining market share and customer stickiness, increasing value-chain integration and margins per tonne, and most importantly, developing and expanding a larger talent pool to compete successfully. We are confident that these distinctive capabilities that we have built will continue to help us achieve our objectives of growth and maximisation of shareholder value going forward.”
Group Financial Review
For Q2 FY2008, Sales Revenue rose 33.1% to S$1.95 billion driven by a Sales Volume growth of 24.3% to 1.42 million metric tonnes, with growth contributed by all four segments.
GC for Q2 FY2008 increased 44.5% to S$175.4 million while NC rose by 43.5% to S$117.1 million. All four business segments registered growth in both GC and NC despite higher interest cost during the period. 60.5% of the growth in NC came from acquired businesses and the balance 39.5% came from existing businesses. NC per tonne grew from S$71 to S$82 as a result of margin enhancement initiatives as well as from the earnings and value-accretive acquisitions.
On a cumulative half yearly basis (“H1 FY2008”), Sales Revenue grew 40.4% to S$3.32 billion backed by a 28.7% growth in Sales Volume to 2.34 million tonnes. 51.6% of the growth in volume was from acquisitions as existing businesses accounted for the balance 48.4%.
During these six months, GC and NC rose 55.0% and 56.3% respectively. All four business segments contributed to the growth in GC and NC. 54.7% of the growth in NC came from existing businesses with the remaining 45.3% from acquisitions. A combination of margin improvement initiatives and earnings-accretive acquisitions led to a growth in NC per tonne from S$72 to S$88.