Olam Group H1 Profit Edges Higher, More Restructuring in Store
2022.08.12 03:14
By Ambar Warrick
Investing.com– Singapore-based commodity trader Olam Group Ltd (SGX:OLAG) logged a slightly higher profit for the first half of 2022, and said it was considering “strategic options” for two more units.
The world’s largest coffee trader said on Friday that its net profit attributable to shareholders for the six months to June 30 rose 1.8% to S$429.1 million ($313.2 million). Revenue jumped nearly 25% to S$28.45 billion, reflecting higher commodity prices.
Olam’s agri goods business, which deals in food and industrial goods, was the biggest driver of earnings, despite volatility in commodity markets due to the Russia-Ukraine war and COVID lockdowns in China.
Volatility in global markets saw Olam’s costs jump nearly 25%.
The group said it remains committed to spinning off its food ingredients business, OFI, through a London IPO, but was waiting for market conditions to improve. The firm did not specify exactly when it would launch the IPO, which it had announced in 2021.
OFI- which deals in coffee, cocoa and edible nuts, accounted for about half of Olam’s first-half revenue. The group had initially planned to launch the IPO in the June quarter, but suspended it indefinitely in the face of unfavorable market conditions.
The firm said it is “cautiously optimistic” over its prospects in the remainder of 2022, and expects Olam Agri to mark a stronger performance for the year over 2021.
Olam also said it will consider “strategic options” for its venture capital and technology and business services arms, as part of a five-year restructuring plan to trim its focus and improve margins.
The group said it has marked continued progress in divesting less important assets and monetizing “gestating” assets, as part of the plan.
Olam said it will see more one-off expenses associated with the restructuring in the second half of 2022, albeit at a lower rate than those seen in 2021.
