3 Things Investors Should Know About Wilmar International Limited’s Latest Earnings
Wilmar International Limited (SGX: F34) is an agricultural company that has four main business segments, namely, Tropical Oils, Oilseeds and Grains, Sugar, and Others.
Last week, Wilmar reported its 2017 first quarter results. The market was delighted with the company’s earnings, judging from how its stock price climbed 9.6% in the day after. Let’s take a look at three useful pieces of information investors may want to know from the announcement:
1. The overall result
The following table shows some important numbers from Wilmar’s income statement for the first quarters of 2017 and 2016:
Source: Wilmar International 2017 first quarter earnings release
You can see why Wilmar’s stock price climbed after its earnings announcement. The company enjoyed strong revenue and profit growth.
2. The segmental performance
Here’s a table showing the profit before tax of Wilmar’s different business segments for the first quarters of 2017 and 2016:
Source: Wilmar International 2017 first quarter earnings presentation
We can observe that most of Wilmar’s business segments experienced growth in the first quarter of 2017, with the exception of the Sugar segment.
The loss in the Sugar segment was mainly due to seasonal maintenance in the first half of the year by the sugar milling business in Australia, and weaker performances from both merchandising and refining activities within the segment.
3. Outlook for 2017
As investors, we rely on many tools, including management’s forecasts, to help us gain insight on what to expect for the near- to long-term performance of our investments’ businesses.
With regard to Wilmar, this is what the company said about its future in its earnings release:
“The Group has shown strong results in the first quarter, particularly from our Tropical Oils and Oilseeds and Grains segments. We expect our Flour business to continue its growth, while volume for consumer products is expected to recover from the seasonal reduction in 1Q2017.
Although lower CPO prices will impact our Plantation and Palm Oil Mills operations, we believe that this will be partially offset by anticipated higher palm oil production. Recent volatility in sugar prices is expected to impact our Sugar operations.
Overall, we are cautiously optimistic that the next quarter’s performance will be satisfactory.
The Group also wishes to announce that it is carrying out an internal restructuring of its China operations with the possibility of a separate listing. As the proposed listing is still at evaluation stage, shareholders are advised to exercise caution in trading their shares. There is no certainty or assurance as at the date of this announcement that the listing proposal will be carried out.”