Olam International, one of the world’s largest suppliers of cocoa beans and products, coffee, cotton and rice, saw its Q3 profits drop 14.2% to S$20.7m ($15.03m) from S$24.11m (S17.50m) in 2017, according to latest results.
The Singapore-based organization blamed tough trading conditions in coffee and weaker performance from its peanut business and commodity financial services.
On the upside, Olam reported that its revenue jumped 23.6% to S$8.29m ($6.02m) from S$6.71m ($4.87m). In its Confectionery & Beverage Ingredients sector, Olam announced that revenue decreased 15.4% to S$5.2bn ($3.77bn) on lower volumes and lower coffee prices. Earnings before interest, tax, depreciation and amortization (EBITDA) improved 12.1% to S$278.9M ($202.46m) as strong performance in the cocoa supply chain and processing compensated for weaker results from coffee.
Olam’s profit decline was also caused by a lower contribution form the peanut business and commodity financial services (CFS), according to its financial statement.
Co-Founder & Group CEO, Sunny Verghese said: “Our Q3 is a seasonally lower quarter which was further impacted by ongoing tough trading conditions in coffee, lower performance from the peanut business and the Commodity Financial Services business.
“We further refined our portfolio and made targeted investments during the year, including into digital initiatives and sustainability solutions, that will position us to capture future growth.”
Operational profit after tax and minority interests also fell 13.8% to S$20.7m ($15.03m) from $24m ($17.42m) in 2017, the firm noted.