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Wilmar Q3 net falls 60%, shares drop 5%

Wilmar Q3 net falls 60%, shares drop 5%
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First Published: Wed, Nov 10 2010. 08 48 AM IST
Updated: Wed, Nov 10 2010. 08 49 AM IST
Singapore: Wilmar International, the world’s biggest listed palm oil plantation firm, reported disappointing quarterly results, weighed by its oilseeds business, sending its shares down more than 5%.
“The results were well below our expectations, mainly because of the loss in the oilseeds segment,” said Ben Santoso, an analyst at DBS Vickers. “We’re putting our forecast and target price under review.”
Wilmar said weak margins contributed to third quarter net profit falling 60% from a year ago, but said it was bullish about the future.
“Despite the weak third quarter performance, the group remains positive on its long-term prospects,” chairman and CEO Kuok Khoon Hong said in a statement.
Wilmar said its oilseeds and grains business suffered a pretax loss of $37.1 million, despite a 28% rise in sales volume, due to “weaker margins and less timely purchases of raw materials”.
By 09:10 am, Wilmar shares were 5.5% lower in a broader market down 0.7%. The shares are little changed so far this year, underperforming a 14% rise in the market.
Wilmar, valued at $34 billion, runs palm oil plantations in Indonesia and Malaysia and a number of processing facilities in China for various oils and grains.
Wilmar earned $259 million in July-September, down from $653 million a year ago when it made an exceptional gain of $167 million from the sale of new shares in its China unit.
The result was lower than an average forecast of $467 million from a Reuters survey of three analysts.
Wilmar competes with Malaysia’s Sime Darby and Singapore’s Golden Agri in palm oil.
Wilmar, controlled by the family of Malaysian billionaire Robert Kuok, has diversified into sugar and earlier this week got approval from Australia’s Foreign Investment Review Board for its $1.5 billion purchase of Sucrogen from CSR Ltd.
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First Published: Wed, Nov 10 2010. 08 48 AM IST