Singapore, Nov 14, 2008 – Olam International Limited, a leading global, integrated supply chain manager of agricultural products and food ingredients, today reported a Net Profit After Tax of S$14.9 million for the first quarter ended September 30, 2008 (“Q1 FY2009”), an increase of 62.0% when compared to Q1 FY2008.
The strong growth in earnings during the quarter was a combined result of growth in Sales Volume and Net Contribution (NC) across all four business segments.
Volume grew by 20.1% to 1.1 million tonnes, leading to a 24.4% growth in Sales Revenue to S$1.71 billion. NC rose 32.2% to S$117.1 million in spite of higher interest costs and funding costs for acquisitions. 64% of the growth in NC was due to volume growth while the balance 36% came from margin improvements.
Olam’s CFO, Krishnan Ravikumar said: “The first quarter is normally our weakest quarter, contributing 5% to 10% of our full years’ earnings. Our business volumes and hence earnings are cyclical with a greater portion of the earnings flowing through in the January–June period, given that we are present largely in northern hemisphere countries, where the harvesting season is typically between October and March.”
Olam’s Group Managing Director and CEO Sunny Verghese said: “We continue to expand our reach both in existing and new origins as we increase our sourcing market share in existing products and also enter into new adjacent products such as Wheat, Canola, Barley, Palm Oil, Rubber and Wool. This allows us to offer an enlarged and diversified basket of products to our growing customer base. We are also positioning Olam to be selectively more integrated in the value chain with a view to earning higher returns and strengthening our competitive advantage to ensure sustained profitable growth.”