How Did The Sugar Business Of Wilmar International Limited Fare In 2017?
In late February, Wilmar International Limited (SGX: F34) released its 2017 full year earnings update. As a quick introduction, Wilmar is an agricultural company that has four business segments: Tropical Oils; Oilseeds and Grains; Sugar; and Others.
Given the complexity of Wilmar’s business, it may be useful for investors to have a look at each segment individually.
In a previous article, I had discussed the Tropical Oils segment. In this article, I will have a quick review of the business performance of the Sugar segment in 2017.
The following table shows the revenue and profit numbers that the Sugar segment delivered for the fourth quarter and the whole of 2017 and 2016:
Source: Wilmar 2017 results announcement
For the fourth quarter of 2017, revenue from the Sugar segment was down by 49% year-on-year, mainly due to a new marketing program which delayed the sales of certain proportions of the sugar produced in 2017 to 2018.
Similarly, the Sugar segment’s revenue in 2017 fell by 14%, driven by lower sales volume in the Milling business, and a weaker performance in the Merchandising, Refining & Consumer Products business. These, along with an impairment of Wilmar’s sugar refinery assets in Australia recognised in 2017, led to a pre-tax loss of US$24.6 million for the Sugar segment in the year.