Financial results

Olam Group reports profits of $136 million for first half of 2023

By Anthony Myers

- Last updated on GMT

Olam Group continues to invest in 'future growth engines'. Pic: Olam Group
Olam Group continues to invest in 'future growth engines'. Pic: Olam Group

Related tags Olam Cocoa financial report

The Singapore-based agri business (which includes ofi - its cocoa and ingredients division) has reported Operational PATMI (profit after tax and minority interest) of S$184.0 million ($136 million) so far this year.

A proposed listing on premium segment in London, with a concurrent listing in Singapore, is expected to take place after Olam Agri IPO on a sequential basis, the Group said after announcing ofi had a “good H1 2023 EBIT performance, excluding the exceptional one-off loss from lower almond yields, led by Ingredients & Solutions as contract re-pricing continues to flow through with anticipated time lag.”

A. Shekhar, CEO of ofi, said: “We are pleased with our underlying first-half performance, which demonstrates accelerated recovery in our Ingredients & Solutions segment as management actions taken last year flow through within the anticipated time lag.

“Energy, logistics and packaging costs have moderated and stabilised, and supply chain bottlenecks have eased. That said, the market environment continued to be challenging, as customers right-sized inventory levels in the first-half, China’s economic re-opening has been more muted than many expected, and end-consumer demand is beginning to show some level of reduction in developed markets​.”

In a statement the Group said ofi is leveraging recent investments to further grow its innovation pipeline and deliver expanded capacity in Ingredients & Solutions in H2 2023.

New greenfield plants (like the one in Tokoroa) being commissioned in H2 2023 will further expand its capacity in three important value-added areas.

It said ofi’s customers continue to value the surety of supply, traceability and sustainability impacts offered by the division, and the integrated customer focus strategy is further building on these long-term relationships. But it warned there is increased caution on end-user demand that has been building in the past few months.

Australian almond orchards

Our underlying performance is stated before the exceptional impact of ofi’s Australian Almond orchards, which saw an unprecedented, materially lower crop yield. This was evident across the entire almond industry in Australia for the 2022-23 growing season, reflecting lower bee activity during pollination and unseasonal cold, wet conditions through the growing and pre-harvest periods. Our crop experts and agronomists concur with external analysis that the 2023 crop was an aberration and the orchards are expected to see yields return to their normal levels from 2024 and beyond​,” Shekar said.

Olam Group Co-Founder and CEO, Sunny Verghese, said: “The focused and differentiated strategies of our operating groups will continue to allow us to capture opportunities across the food, feed and ingredients space … ofi, which will list in London and Singapore, will follow suit on a sequential basis based on prevailing market conditions. Concurrently, we are reconfiguring our portfolio for the Remaining Olam Group while investing and developing our future growth engines​.”

Related topics Commodities

Related news