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Olaim Group Financial Results
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bechaotic
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16-Jan-2023 10:57
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If Olam is giving out as dividend in specie upon listing of the Olam-Agri, why isn' t the share price moving? | ||||
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Joelton
Supreme |
13-Jan-2023 10:16
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Olam Agri&rsquo s IPO rides on the back of enhanced global focus on food security
The IPO of Olam Agri Holdings, the agribusiness unit of Olam Group, will provide shareholders with the opportunity to tap onto current favourable agribusiness trends, enhanced global focus on food security as well as the unit&rsquo s track record of consistent performance, its co-founder and group CEO Sunny Verghese said in a briefing.
The company had earlier announced that it is seeking a primary listing on the mainboard of the Singapore Exchange (SGX) as early as the first half of 2023. The company is also exploring a concurrent listing on the Saudi Stock Exchange (Tadawul), subject to market conditions. Both markets, interestingly, are two of the better performing ones among their global peers last year.
The listing follows the completion of the transaction with Saudi Agriculture and Livestock Investment Co (Salic) last month, which would provide the company with significant additional partnership synergies, says Verghese.
On March 25, 2022, Olam announced that it has formed a strategic partnership with Salic with the sale of an estimated 35.4% substantial minority stake in Olam Agri for US$1.24 billion ($1.65 billion), valuing the unit at an equity valuation of US$3.5 billion. Salic is a wholly-owned subsidiary of the Public Investment Fund of Saudi Arabia.
If the concurrent listing takes place, the Olam Agri IPO would be the first dual-listing for a company on these two bourses and the first ever listing in Saudi Arabia of a non-Gulf Cooperation Council (GCC) incorporated business.
The concurrent listing&rsquo s timeline will depend on regulatory approvals. Given that no foreign company has ever been listed in Saudi Arabia, the regulatory processes may not be able to be completed by the timeframe that Olam has in mind, explains Verghese.
&ldquo Our indication is that there is keenness to see this happen &mdash because if they want a first foreign company listed in Saudi Arabia, I think it is a great way to start with a company that is owned by Temasek, Salic and Mitsubishi Corp,&rdquo says Verghese, referring to his largest shareholders. &ldquo They would be quite happy to start with a &lsquo good exemplar&rsquo to then persuade other international companies and global businesses to consider listing in Saudi Arabia,&rdquo he adds.
Verghese notes that Tadawul has a market capitalisation of about US$3 trillion. Although oil and gas giant Aramco accounts for US$1.8 trillion of the market capitalisation, the remaining US$1.1 trillion, a substantial pool by any measure. Given that the current valuations in the Saudi market can command relatively higher valuations, the company has decided that the IPO would be more successful if it were to tap both pools of liquidity in Singapore and Saudi, he says.
Acknowledging news reports claiming that the IPO is seeking to raise up to US$1 billion, Verghese says the size is still undetermined &mdash although it would be &ldquo meaningful&rdquo and &ldquo material&rdquo .
Although no final decision has been made on the Olam Agri IPO offer structure, the IPO may involve an offering in Singapore and globally via an issuance of new Olam Agri shares as well as a sale of shares in Olam Agri by the group.
Concurrently, Olam Agri will be demerged from the group, via a distribution in specie of shares in Olam Agri to Olam&rsquo s shareholders, at the point of demerger in conjunction with the Olam Agri IPO. Shareholders of the company will not need to make any payment for shares in Olam Agri and will continue to retain their shares in the Olam.
Growing population, urbanisation and changing diet
Olam Agri&rsquo s IPO was announced on the back of growing demand for food, feed, and fibre &mdash the three agribusinesses that the company dabbles with &mdash due to the growing population and changing demographics.
In November last year, the global population exceeded 8 billion and is expected to grow to 10 billion by 2050. Coupled with massive urbanisation and per capita income growth, Verghese believes that there is going to be an exponential growth in demand for agro industrial raw materials.
He further points out that growing per capita income translates to an acceleration of a transition in dietary habits, from a carbohydrates and cereal-based diet to a more protein and fats-based diet. This leads to a multiplier impact on the need for raw agricultural materials to feed ruminants and poultry, as meat consumption is expected to grow up to 500 million tonnes in 2050, versus an estimate of 325 million tonnes last year.
Another significant issue seen in the industry is more diversion of food and feed raw materials into biofuel use, which will continue as economies look for energy transition strategies. Verghese also points out the growing scarcity of resources, particularly arable land and water availability amid the need to almost double food production to meet the growing demands in dietary changes.
To stay ahead of Singapore and the region&rsquo s corporate and economic trends, click here for Latest Section
Food security concerns are increasingly gaining prominence across the world. As a result of food price inflation, roughly 60 countries have put in place more non-tariff barriers, says Verghese. This includes outright export bans, lifting of import duties as well as other protective measures to achieve food security in terms of nutritional value and food accessibility.
In Saudi Arabia, the mandate of Olam Agri&rsquo s strategic investor Salic is to ensure food security for Saudi Arabia, which imports between 70% and 75% of its total food requirements. Verghese believes that via Olam Agri will be able to aid the execution of the food security mandate within and beyond Saudi Arabia to the broader Middle Eastern region.
In terms of Olam Agri&rsquo s operating performance, in FY2021, the company generated $31.3 billion in revenue. Ebitda stood at $930 million with a CAGR of 42.5% over the four year period of 2018 to 2021, while ebit stood at $753 million with a four year CAGR of 46.7%. Its ebit to coverage ratio was close to 16%. As at last year, Olam Agri had a presence in over 30 countries, with a workforce of 9,100 employees across more than 50 manufacturing and processing facilities.
Delay in OFI IPO
Olam Agri is one of three of Olam&rsquo s operating groups, and follows a transformation reorganisation plan to split the company into three distinct and coherent groups in January 2020. The other two operating groups are its value-added ingredients unit Olam Food Ingredients (OFI) and an umbrella category of &ldquo remaining business&rdquo .
Olam intended to demerge OFI via an IPO in 2QFY2022, with a primary listing on the London Stock Exchange and a concurrent secondary listing on the SGX. Last year, however, it announced that the listing was postponed, citing less than favourable market conditions. Verghese asserts that the company is ready for the listing, but will do so sequentially after Olam Agri&rsquo s IPO.
&ldquo We believe that an Olam Agri listing is more imminent and more possible, even under current market conditions. We do not want to do a concurrent listing for Olam Agri and OFI &mdash although they provide different propositions with different equity stories &mdash as we do not want large institutional investors to [make a choice between them]. Instead, we want some clear distance in time between the two,&rdquo he explains.
Since OFI&rsquo s IPO preparations were done earlier, it has completed the establishment of separate governance with a new board of directors. The board is chaired by Irish businessman Niall FitzGerald, known for his extensive experience in Unilever.
Meanwhile, Olam Agri currently has an &ldquo initial board&rdquo consisting of six members of shareholder representatives which will end its tenure prior to the IPO. These are the representatives from major shareholders such as Temasek, Salic and Mitsubishi Corp.
Olam has embarked on a search for an IPO-ready board as well as leadership management team which will be announced in due course.
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Dragonite
Member |
11-Jan-2023 14:07
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At current share price of SGD 1.59, dividend yield is more than 5%. WOW!! OLAM dividend history FY2022 ? cents (to be announced next month during results release) HY2022 4 cents Total ? cents (to be announced next month during results release) FY2021 4.5 cents HY2021 4 cents Total 8.5 cents FY2020 4 cents HY2020 3.5 cents Total 7.5 cents FY2019 4.5 cents HY 2019 3.5 cents Total 8 cents |
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Dragonite
Member |
11-Jan-2023 11:38
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RECAP: OLAM GROUP NAV after sale of 35% stake in OLAM AGRI to SALIC is more than SGD 2.20!! Currently share price is only SGD 1.60, that means it is TRADING AT 30% DISCOUNT TO NAV From historical records, the yearly dividend is at least 8 cents, this means that OLAM GROUP DIVIDEND YIELD is more than 5% And there are two potential IPOs, OLAM OFI and OLAM AGRI to ILLUMINATE the value of OLAM GROUP Dyodd |
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Joelton
Supreme |
11-Jan-2023 08:51
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Olam targets agribusiness IPO in H1 with listings in Singapore, Saudi Arabia
OLAM Group : VC2 +3.9% has outlined plans to list Olam Agri, its agribusiness unit, as early as H1 2023, it said on Tuesday (Jan 10).
The move will result in a primary listing in Singapore, a concurrent one in Saudi Arabia, and a demerger of Olam Agri and Olam Group through a distribution in specie of shares in Olam Agri to shareholders.
If the transaction goes through, Olam Agri&rsquo s initial public offering (IPO) will be the first dual-listing for a company on both the Singapore and Saudi Arabia stock exchanges and the first-ever listing in Saudi Arabia for a non-Gulf Cooperation Council incorporated business, Olam Group said in a press statement.
The latest development comes days after Bloomberg reported that the group had picked banks to lead the proposed Olam Agri listing, which could raise as much as US$1 billion, according to sources.
Although no final decision has been made on the Olam Agri IPO structure, the group said the IPO might involve an offering in Singapore and globally via the issuance of Olam Agri shares and a sale of shares in Olam Agri by Olam Group.
Olam Agri will be demerged from the group through a distribution in specie of Olam Agri shares to Olam Group shareholders. They do not need to pay for any Olam Agri shares and will continue to hold their shares in the group.
There is no change to the group&rsquo s plans for Olam Food Ingredient&rsquo s (ofi) concurrent listings in Singapore and the London Stock Exchange, it said. The IPO will take place after Olam Agri&rsquo s listing, subject to market conditions.
Olam Group said it chose SGX as its primary listing venue due to its strong investor base for food and agribusiness companies, along with continued long-term shareholder support.
The additional listing in Saudi Arabia will allow the group to access the market&rsquo s large incremental investor base. Building on its partnership with The Saudi Agricultural and Livestock Company (Salic), Olam Agri will be positioned to enhance its activities in the Gulf region, particularly in Saudi Arabia.
In December, Olam Group completed the sale of a substantial 35.4 per cent minority stake in Olam Agri to Salic for US$1.2 billion, valuing the business at about US$3.5 billion.
Olam Group chief executive Sunny Verghese said Olam Agri has demonstrated a consistent performance track record, with operating profit rising at a compound annual growth rate of 40.1 per cent over the last three years.
&ldquo With the completion of the minority stake sale and strategic partnership with Salic, Olam Agri is positioned to grow as a result of the demand for food, feed and fibre across end-consumption growth markets,&rdquo he added.
Olam Group said on Tuesday that there is no change to its plans for Olam Food Ingredient&rsquo s (ofi) concurrent listings in Singapore and the London Stock Exchange. The IPO will take place after Olam Agri&rsquo s listing, subject to market conditions.
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Rightstock
Senior |
09-Jan-2023 08:42
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Thanks Fataba. 
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FATABA
Supreme |
09-Jan-2023 08:17
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No Olam Group has not distributed or decided or advise on the detail of the lisitnng in LSE or SGX yet. So the current listed Olam STILL have all the 3 dvisions inside it I expect information to be coming up very soon as loan on this listing are approved n out DYODD
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Rightstock
Senior |
08-Jan-2023 09:01
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May I know from the followers here whether Olam Group had aready distributed Olam Agri shares to Olam Group shareholders or it will be distributed upon the agri business IPO. | ||||
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Joelton
Supreme |
07-Jan-2023 09:32
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Olam Agri picks banks for US$1b Singapore listing
OLAM Group has picked banks to lead a planned Singapore listing of its agribusiness unit that could raise as much as US$1 billion, people familiar with the matter said.
The company selected Citigroup, DBS Group Holdings, HSBC Holdings and Morgan Stanley to arrange the planned initial public offering of Olam Agri Holdings, according to the people.
It&rsquo s aiming to complete the share sale later this year, the people said, asking not to be identified because the information is private. The deliberations are ongoing and details of the listing could change, the people said.
A representative for Olam said the company continues to focus on executing its reorganisation plan and will make a public announcement about any material developments. Spokespeople for the banks declined to comment.
Olam Group shares jumped as much as 3.4 per cent on Friday, touching their highest intraday level in nearly six months, according to data compiled by Bloomberg. It has a market value of about US$4.3 billion.
The group said in December it completed the sale of a 35 per cent stake in Olam Agri to state-owned Saudi Agricultural & Livestock Investment, a subsidiary of the oil-rich country&rsquo s Public Investment Fund. The deal valued the business at about US$3.5 billion.
Olam Agri sells grains and seeds and makes everything from edible oils to pasta, according to its website.
It has over 9,000 employees and operations in more than 30 countries.
The business is one of Olam Group&rsquo s main operating units, formed in a reorganisation announced in early 2020.
The group delayed a planned London IPO last year for another unit, Olam Food Ingredients, citing the war in Ukraine.
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CheeryVGoh
Supreme |
28-Dec-2022 14:02
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News released on 23rd Dec afternoon by SGX.
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FATABA
Supreme |
28-Dec-2022 10:56
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WOW prices start moving yesterday before this news was out ? Insider infro ? Whatever Olam is worth more then it parts ....dyodd
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Dragonite
Member |
28-Dec-2022 10:10
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With the money gained from the successful sale of stake in Olam Agri to the Saudis, Olam NAV will definitely increase to more than 2 dollars...
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Joelton
Supreme |
06-Dec-2022 08:54
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Singapore&rsquo s Olam Agri secures US$2b for parent&rsquo s reorganisation
SINGAPORE&rsquo S Olam Agri has secured a US$2 billion bridge financing facility to support the reorganisation plan of its parent, Olam Group, the grains and animal feed trader said on Monday (Dec 5).
Agri-business giant Olam Group announced its reorganisation plan in January 2020 to categorise its products under two operating businesses, with an intention to potentially spin out each unit and list them separately.
It has since secured multiple loans including a US$2.9 billion facility in August for refinancing its existing loans.
The 18-month bridge loan facility may also be used for general corporate purposes, Olam Agri said.
&ldquo This transaction gives Olam Agri significant financial flexibility while Olam Group continues on its reorganisation pathway,&rdquo said Olam Group CFO N Muthukumar.
In August, Olam Group posted a marginal rise in net profit for the first half of fiscal 2022, as a weak performance in its food ingredients unit partially countered strength in the Olam Agri business.
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FATABA
Supreme |
04-Nov-2022 18:06
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Any idea when is Olam Q3 result guildance ?
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antifragile
Senior |
04-Nov-2022 16:26
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TP $1.85 | ||||
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antifragile
Senior |
31-Oct-2022 10:26
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Look at Wilmar! Olam next! |
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limkopilim
Member |
31-Oct-2022 10:15
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SBB driving the price?
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antifragile
Senior |
27-Oct-2022 15:37
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Sum of parts more than the current price. Wont go wrong |
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FATABA
Supreme |
27-Oct-2022 14:01
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The listing was to be end of the year and early next year. However, looking at the UK situation .....honestly wondering how long this new PM will be ( ohoh) .....listing could be delayed But OLam is certainly going ahead . it is just a matter of timing . Global demand for products that Olam is having is getting to be a valuable product for many . Dyodd
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limkopilim
Member |
27-Oct-2022 12:25
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Olam SBB for several days... Any news?? | ||||
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