Wilmar International is expected to benefit from an increase in palm oil prices, a report by KGI Research Singapore says.

 

In its Oct 11 report, the KGI team expects to see an increase in palm oil prices as Indonesia plans to increase its biodiesel mandate from 35% to 40% palm oil-based fuel which could put pressure on global palm oil supplies.

 

This has the potential of increasing Indonesia&rsquo s biodiesel consumption to 16 million kilolitres, requiring an additional 1.5 to 1.7 million metric tonnes of palm oil, the report notes.

 

As such, export volumes may fall, causing global supply shortages and higher prices for consumers, the report adds.

 

The report further states that palm oil production in Indonesia and Malaysia have been affected by labour shortages, increasing fertiliser costs and weather conditions.

 

&ldquo Global palm oil production is expected to increase by 2.3 million metric tons in 2024/25, but the rise in demand for biodiesel could offset this growth, driving prices higher,&rdquo the report notes.

 

According to the report, palm oil prices are expected to rise further, with projections suggesting a price of around RM4,000 ($1,218.70) per metric tonne in 2025.  

 

The report recognises that this is likely to benefit palm oil producers such as Wilmar International F34 .

 

Further to the report, it is stated that Wilmar International and Adani Enterprises are looking to sell a 13% stake in their joint venture (JV), Adani Wilmar, which is valued at US$736 million ($960.6 million).

 

Adani Wilmar is a key consumer goods company in India, offering products such as edible oils wheat flour, rice and sugar.

 

Currently, the two companies hold an 88% stake in the JV collectively. 

 

They are doing so to meet Indian regulations requiring at least 25% of shares to be held by non-founders within three years of listing, the report notes, adding that their three-year grace period ends in Feb 2025.

 

Wilmar International&rsquo s financial year ends on Dec 31.

 

The report states that total revenue of 1HFY2024 decreased 4.9% y-o-y to US$30.93 billion from US$32.54 billion, mainly due to a decrease in commodity prices, but slightly offset by higher sales volumes.

 

In 1HFY2024, core net profit was US$606.3 million and net profit was US$579.6 million, representing a 5% and 5.3% y-o-y increase, respectively.

 

The report attributes this to the improved performance in the feed and industrial products and food products segment but is partially offset by lower contributions from Wilmar International&rsquo s JV, associates and sugar milling operations.

 

Earnings per share (EPS) rose in 1HFY2024 to US 9.3 cents from US 8.8 cents in 1HFY2023.

The counter remains one of the most actively traded in terms of volume with 12.9 million shares transacted

 

SHARES of Wilmar International : F34 +7.01% surged on Friday (Sep 27) to reach a near five-month high on brisk trading activity.

 

At 11.12 am, the agribusiness counter rose S$0.28 or 8.9 per cent to S$3.42 after 11.2 million securities changed hands. This is higher than the stock&rsquo s average volume of 4.5 million securities.

 

The last time the counter had reached such levels was in April, when it traded above S$3.40.

 

By 11.37 am, it had eased slightly to S$3.38, but it was still up S$0.24 or 7.6 per cent. It was still one of the most actively traded counters in terms of volume, with 12.9 million shares transacted.

 

Shares of Wilmar closed on Friday at S$3.36, up S$0.22 or 7 per cent.

 

No married deals were recorded, ShareInvestor data indicated.

 

In August, Wilmar reported that its net profit for the first half ended Jun 30 was US$579.6 million, up 5.2 per cent from US$550.9 million in the year-ago period.

 

Excluding losses from non-operating items, net profit would have been US$606.3 million, up 5 per cent year on year from US$577.2 million.

 

The group declared an interim dividend of S$0.06 per share, which it maintained from last year. It was paid out on Aug 29.

 

Revenue for the first half, however, slid 4.9 per cent to US$30.9 billion, from US$32.5 billion, as commodity prices decreased.

 

The decline was cushioned by higher sales volume over the period.

 

Adani Wilmar

Bloomberg earlier reported that Adani Enterprises and Wilmar are expected to start the sale of a minority stake in their consumer joint venture Adani Wilmar as early as October to abide by shareholding regulations, according to people familiar with the matter.

 

The majority owners of Adani Wilmar are planning to sell a roughly 13 per cent interest in the company &ndash valued at about US$736 million, based on Sep 16&rsquo s closing price.

 

Established in 1999, Adani Wilmar has 23 plants in India and sells kitchen staples for Indians, including edible oil, wheat flour, rice, pulses and sugar.

 

ADANI Enterprises and Wilmar International are expected to start the sale of a minority stake in their consumer joint venture Adani Wilmar as early as next month to abide by shareholding regulations, according to people familiar with the matter.

 

The majority owners of Adani Wilmar are planning to sell a roughly 13 per cent interest in the company &ndash valued at about US$736 million based on Monday&rsquo s (Sep 16) closing price &ndash to comply with Indian securities laws, the people said, asking not to be identified discussing confidential information. Local regulations require at least a 25 per cent shareholding should be with non-founders within three years of listing.

 

Adani Wilmar&rsquo s stock climbed 2.1 per cent on the news, and closed 1.4 per cent higher on Monday. The shares have advanced 3 per cent this year, giving the company a market value of US$5.7 billion. The broader gauge S& P BSE Sensex has risen almost 15 per cent.

 

Since the flagship of billionaire Gautam Adani&rsquo s conglomerate and Wilmar hold almost 44 per cent each in Adani Wilmar, this 88 per cent overall shareholding needs to be pared down to 75 per cent by February when the three-year grace period ends.

 

The stake could be sold in one or two tranches by February and advisers will soon start meeting investors in the US, South-east Asia as well as India, the people said. Deliberations are ongoing and no final decisions have been made, the people said.

 

A representative for Adani Enterprises did not have any immediate comment when contacted by Bloomberg News, while Wilmar declined to comment.

 

Jefferies Financial Group, Nuvama Wealth Management and SBI Capital Markets are working with Adani Enterprises and Wilmar on their divestment plans, Bloomberg reported on Jul 18.

 

The sale will be a barometer of investor appetite for the consumer goods maker that&rsquo s just returned to profit. The ports-to-power conglomerate has begun tapping capital markets as it moves past the scathing short seller attack from Hindenburg Research in early 2023. Adani Group has denied the allegations from Hindenburg. Adani Energy Solutions raised US$1 billion through a share sale last month while Adani Enterprises is considering similar.

 

Established in 1999, Adani Wilmar has 23 plants in India and sells kitchen staples for Indians, including edible oil, wheat flour, rice, pulses and sugar. 

CANBERRA &ndash Workers at Australia&rsquo s largest sugar maker, Wilmar Sugar and Renewables, voted to accept a pay offer, the company said on Sept 13, ending a months-long industrial dispute that disrupted sugar production.

 

Wilmar Sugar is owned by Singapore-listed Wilmar International.

 

Wilmar Sugar&lsquo s eight mills churn out more than 2 million tonnes of sugar worth around US$1 billion (S$1.3 billion) a year, over half the country&rsquo s total, most of which is exported.

 

Industrial action from May delayed the start of the cane crushing season and led to several shutdowns after it had begun.

 

That raised the risk that the full harvest might not be processed before bad end-of-year weather made it impossible to bring in cane.

 

Fifty-five per cent of workers voted in favour of a three-year deal that gives more than 1,300 of them a one-off bonus, a 12 per cent pay increase by year-end and 4 per cent more in December 2025, Wilmar said.

 

&ldquo It draws a line under a period that impacted not only our business and our people, but the growers and harvesting operators who are so critical to the sugar supply chain,&rdquo a spokesperson for the company said.

 

Wilmar Sugar&lsquo s mills form the economic centre of communities on Australia&rsquo s hot and humid north-east coast, where sugar is a major industry.

 

&ldquo The deal doesn&rsquo t give us everything our members were asking for, but it&rsquo s a huge win for our members and the community,&rdquo said Australian Workers&rsquo Union official Jim Wilson.

 

A pay dispute at another mill, Tully Sugar, owned by Chinese conglomerate Cofco, also ended last month with workers accepting a deal.

 

&ldquo It&rsquo s great to have this issue finally resolved,&rdquo said Mr Owen Menkens, the chairman of Canegrowers, an industry group.

 

&ldquo It has dragged on for far too long, has delayed cane crushing across half of the industry, and caused great anxiety to growers and harvesting contractors,&rdquo he said.

 

Wilmar Sugar said that so far this crushing season its mills had processed about 6.3 million tonnes of sugar cane, around 40 per cent of the estimated crop.