More than four-fifths of the impacted workers are from Indonesia others from Singapore, India, Australia

 

[SINGAPORE] Food and agri-business giant Olam : VC2 0% said on Thursday (Aug 28) that it will close Jiva Ag, a digital farmer services platform developed by the group&rsquo s venture arm, Nupo Ventures.

 

A total of 606 employees will be affected. 

 

Eight are from Singapore, where the group is headquartered and listed. Of the remaining, 531 are from Indonesia, 66 from India and one from Australia. 

 

Olam said that it is supporting the impacted workers with redeployment opportunities within the group or severance packages. They will also be provided with outplacement services and access to the group&rsquo s employee assistance programme. 

 

The closing was attributed to the expected continuing investment needed to sustain Jiva Ag&rsquo s operations in, what the group described as, &ldquo challenging times and difficult market conditions&rdquo . 

 

Two weeks ago, the group reported a 574 per cent climb in net profit for its first half-year ended Jun 30. But it also posted a loss of S$13.2 million related to the impairment of intangible assets within its incubating businesses segment &ndash primarily associated with Jiva Ag. 

 

Olam expects to book and announce one-off costs estimated at up to US$9 million related to the closure in its financial results for the second half of 2025, ending Dec 31. The costs are not expected to have a material impact on the group&rsquo s results in the current financial year, said the press statement. 

 

Intellectual property associated with Jiva Ag will be retained by Olam or one of its subsidiaries, it added. 

 

Olam noted that its decision follows its updated re-organisation plan for the year announced earlier in April, which aims to de-lever the balance sheet of the remaining Olam Group &ndash one of its three operating groups, the other two of which are Olam Food Ingredients and Olam Agri. 

 

The goal is to make the remaining Olam Group debt-free and self-sustaining, and to responsibly divest all of its assets and businesses over time, said the mainboard-listed company.

 

The group would receive additional considerations of more than US$136 million if the first tranche of Olam Agri sale is not completed by end-2025

 

[SINGAPORE] Olam Group posted a 574 per cent rise in net profit to S$323.8 million for its first half year ended Jun 30, from S$48 million in the previous corresponding period.

 

This includes profit from continuing operations of S$177.3 million, compared with a loss of S$92 million in the corresponding period last year. Olam Agri, the division being hived off from the group under its major restructuring, registered a net profit of S$146.4 million, up 4.6 per cent from S$140 million in H1 2024.  

 

The process of getting regulatory approvals for the sale of its remaining 64.6 per cent interest in Olam Agri to Saudi Agricultural & Livestock Investment Company (Salic), announced in February, is on track, noted Olam Group co-founder and chief executive officer Sunny Verghese in an earnings briefing on Thursday (Aug 14).

 

The proposed sale in two tranches with a base consideration of US$2.6 billion was approved by shareholders at its extraordinary general meeting on Jul 4.

 

Meanwhile, the group is receiving additional consideration of US$636,855 a day multiplied by the number of days from (and including) Jun 1, up to (and including) the completion of the first tranche, under the agreements with Salic.  

 

&ldquo We can use (the additional considerations) to repay debt or pay dividends,&rdquo said Verghese, who will depart the group with Olam Agri when the sale completes. He added that the use of the additional proceeds will be up to Olam Group to decide. 

 

Shareholders of Olam Group can also expect special dividends as the group progressively divests the constituent businesses under the remaining Olam Group. 

 

The group has already entered into a sales agreement to dispose one of the 10 businesses at a consideration of US$175 million, and the sale is expected to be completed by end-2025. 

 

Verghese noted that a core element of the re-organisation plan is to create a sharper business focus while realising intrinsic value for ofi (previously known as Olam Food Ingredients). The group aims to remove the conglomerate discount and increase share liquidity for its counter. 

 

What&rsquo s next for Olam Group

While dual-listing of ofi is still on the table, Verghese said the listing status of Olam Group will depend on whether the remaining entity still meets Singapore Exchange&rsquo s listing requirements after it divests all businesses under the remaining Olam Group. 

 

Winding up the group would be one option among others, he acknowledged, adding that the outcome would depend on the divestment timeframe of the remaining Olam Group.

 

The search for a new chief executive officer is underway as Verghese will leave the group, along with Olam Agri, to Salic. However, he noted that the six-month transition period after the sale&rsquo s completion means he can continue to support the group in his current role. 

 

The first tranche of the sale of Olam Agri is expected to be completed upon regulatory approvals. The second tranche, which is under a put/call option, will be exercised within three years after the completion of the first. 

 

Improved earnings

&ldquo The reversal of losses from continuing operations in H1 2024 to profitability in H1 2025 was mainly on account of the swing in earnings contribution from the remaining Olam Group as it reported earnings before interest and tax (Ebit) of S$172.9 million in the current period, versus a loss of S$93.4 million previously,&rdquo said the group. 

 

Its food-ingredient unit ofi reported an Ebit of S$535.8 million, up 12.7 per cent on the year. Both operating groups, namely the remaining Olam Group and ofi, lifted group Ebit to S$708.7 million in H1 2025, from S$382.1 million in H1 2024.

 

Revenue of the entire group stood at S$33.3 billion, up 23.8 per cent on the year, on higher average sales prices due to increased input prices, namely cocoa and coffee in ofi, as well as volume growth coupled with price increases in rubber and edible oils in Olam Agri. 

 

Revenue of the operating groups stood at S$15.3 billion, up 49.8 per cent from S$10.2 billion in H1 2024. 

 

Net finance costs from continuing operations amounted to S$551.7 million, 11 per cent higher on the year. 

 

Earnings per share (EPS) of the entire group stood at S$0.0816, up from S$0.0084 in the prior-year period. In particular, EPS of continuing operations was S$0.0428, from a loss per share of S$0.0287 in H1 2024.

 

The group has declared an interim dividend of S$0.02 a share, down from S$0.03 a share declared for the year-ago period. It will be paid out on Aug 29, after the Aug 22 record date. 

 

In a separate filing on Thursday, Olam Group announced that ofi has secured a multi-tranche and term loan aggregating US$2.1 billion for refinancing of ofi&rsquo s existing loans. This comprises a two-year revolving credit facility and a three-year term loan, and will be transferred to ofi following its planned initial public offering and demerger. 

 

To date, ofi has secured total loan facilities amounting to US$2.5 billion, and Olam Agri has secured loan facilities totalling US$3.9 billion for refinancing of its existing loans and for general corporate purposes.