ShareJunction - Stock Forum Messages

Wilmar Intl Last:3.56

+0.06

Wilmar

Wilmar H1 net profit falls 53% to US$551 million on lower margins

Wilmar chief executive Kuok Khoon Hong says the company&rsquo s first-half performance had been affected by a slowdown in most markets, except India, in the second quarter of the year.

WILMAR International&rsquo s net profit for the half year ended June 2023 fell 52.7 per cent to US$551 million, from US$1.2 billion last year.

This was due to lower contributions from food products and feed and industrial products, despite higher sales volume.

However, this was partially offset by improved contributions from its sugar merchandising and shipping divisions, as well as &ldquo strong performances&rdquo from its European associates and joint ventures, said the company in an earnings announcement on Friday (Aug 11).

Revenue for the agribusiness group slipped 10 per cent, falling to US$32.5 billion, from US$36.1 billion in H1 last year.

Earnings per share saw a 52.4 per cent contraction, down to 8.8 US cents, from 18.5 US cents.

The board has approved an interim dividend of S$0.06 per share, unchanged from last year. This will be paid out on Aug 30, after books closure on Aug 23.

Wilmar chief executive Kuok Khoon Hong said the company&rsquo s first-half performance had been affected by a slowdown in most markets, except India, in the second quarter of the year. Business performance was further impacted by lower palm oil and fertiliser prices, as well as lower processing margins for the company&rsquo s mid and downstream operations, he added.

Barring &ldquo unforeseen circumstances&rdquo , the group expects its H2 performance to be better, buoyed by its new businesses in condiments, food park and central kitchen projects, which are expected to become &ldquo significant contributors&rdquo to its future operations.

good result to race the price to the bottom.... :)))
I am hit too... :(

axlaxlaxl ( Date: 11-Aug-2023 17:56) Posted:

are u sure its a good results?? I dont think so....

Startsmm ( Date: 11-Aug-2023 17:48) Posted:

Good result 👏 👍

are u sure its a good results?? I dont think so....

Startsmm ( Date: 11-Aug-2023 17:48) Posted:

Good result 👏 👍

https://links.sgx.com/1.0.0/corporate-announcements/GCVHX3CKNTQLQSBM/768642_Wilmar_1H2023%20Result%20News%20Release.pdf

Every day eat consumer products not much affected by crashing margin.ready to eat pack will help with more profit. Div return 4%+ only. Yes their high debt is a concern. But that is their way of business, build solid solid but very high cost. If one day they decide to go low cost by selling facilities and use a guarantee buy sell vol and price, a lot of cash will be realeased. Capital and working. Their recycling of capital on very profitable subsidiary at up cycle is v good

Wilmar to sell entire 30.1% stake in Moroccan sugar producer Cosumar for S$812 million

AGRIBUSINESS group Wilmar International : F34 +0.26% said on Sunday (Jul 30) that it has entered into a deal with several Moroccan investors to dispose of its entire 30.1 per cent equity stake in Casablanca Stock Exchange-listed Cosumar.

The total cash consideration for the sale is about 5.96 billion Moroccan dirhams (about S$812.3 million).

The carrying value of the investment in Cosumar in Wilmar&rsquo s books was US$336.2 million as at Dec 31, 2022.

Cosumar&rsquo s main business is the production of sugar through the processing of sugar cane and sugar beet in Morocco as well as the refining of imported raw sugar and the marketing and distribution of these products.

&ldquo The completion of the Cosumar transaction, targeted to happen at the latest in the fourth quarter of 2023, is subject to certain conditions, including regulatory approvals,&rdquo Wilmar said.

As part of the agreement, Wilmar will make two acquisitions from Cosumar.

Firstly, it will buy Cosumar&rsquo s entire 45 per cent equity interest in Morocco-incorporated Wilmaco for a total cash consideration of 85.1 million Moroccan dirhams. This will result in Wilmaco becoming a wholly-owned subsidiary of Wilmar.

In the second acquisition, Wilmar will buy Cosumar&rsquo s entire 43.3 per cent equity interest in Durrah Advanced Development Company, which is incorporated in Saudi Arabia, for a total cash consideration of 242.8 million Saudi riyals (about S$86.2 million). The deal will boost Wilmar&rsquo s stake in Durrah from 5 per cent to 48.3 per cent. The balance 51.7 per cent is held by local Saudi investors.

Wilmaco&rsquo s main business is the production, development, processing, import, export and marketing of vegetable fats and their by‐ products. The construction of the Wilmaco speciality fats facility is expected to be completed in Q4 2023.

Durrah&rsquo s main business is the refining of imported raw sugar, and the marketing and distribution of these products.

These two acquisitions are subject to terms to be finalised by September 2023 and to certain conditions, including approval from Cosumar&rsquo s board. &ldquo When completed, these transactions will not have a significant financial impact on Wilmar,&rdquo the Singapore Exchange mainboard-listed group said.

&ldquo As there is no certainty that the above mentioned transactions will be completed, investors are advised to trade with caution when dealing in the shares of Wilmar,&rdquo it added.

W result coming out next Friday 11th , I am wondering how much dividend it can afford ?
Honestly I am not positive for Wilmar for a couple of reasons ...
1. W high interest rate ( another qtr pt now ) wilmar are in $B of loan ...wonder how much more this wld cost the bottom line
2. China 1H business is not good which is Wilmar major market ..it crash seed business will be affected ?
3. W major global weather issue ( Olam recent prifit guidance ) ....I really wonder how much Wilmar could be affect too ? ( no news )
DYODD

agreement to dispose consumar sa is good. recycle profitable business into new area of growth.
about usd605m at carrying investment value of usd336.2m. good to improve cash flow and profit
when completed.

sugar around 23.92. 5 years low at 9.70
palm oil around 4006. 5 years low 1890.
high price will results in better profit eventually.

maybe buy ? lol

pursuer76 ( Date: 21-Jul-2023 11:23) Posted:

Dropped consecutively for 2 days. Time to let go?

Anyone knows they recently got do any more sharebuy backs ?

Both DBS and esp Maybank ( do kn the msia mkt well ) normally do have an accurate view on Wilmar.
Both are lowering the Tp for 2023. esp due to the weaken China mkt which is Wilmar major mkt.
Plus w the legal issue in Indonesia,,,, cant say Wilmar dont have much headwind this whole year.
DYODD ,

Joelton ( Date: 11-Jul-2023 16:02) Posted:

Analysts cut Wilmar target price as China growth outlook dims

Both research houses have lowered their near-term earnings forecasts to account for lower contributions from China.

BOTH DBS Group Research and Maybank Securities have lowered their target prices for Wilmar International : F34 +0.27%, due to expectations of a slowdown in demand from China as the country&rsquo s growth outlook weakens.

DBS on Monday (Jul 10) trimmed its target price to S$5.30 from S$6.67, while retaining its &ldquo buy&rdquo call on the stock. Maybank, which has an unchanged &ldquo hold&rdquo call on Wilmar, lowered its price target to S$3.99 from S$4.27 in a report on Jul 7.

Both research houses have lowered their near-term earnings forecasts to account for lower contributions from China, which consist mostly of the group&rsquo s tropical oil refining business.

&ldquo Despite the short-term earnings weakness, Wilmar&rsquo s integrated food products platform has room to further expand via its downstream division spanning consumer products to central kitchen,&rdquo said DBS analyst William Simadiputra.

Simadiputra said he continues to like Wilmar for its increasing focus on the downstream business, which he believes will &ldquo create a more stable earnings platform ahead&rdquo .

DBS is projecting Wilmar&rsquo s earnings to recover to some US$2 billion in FY2024, up 23 per cent year on year, as the group&rsquo s tropical oil refining margins are expected to improve.

It also expects the group to capitalise on the recovering edible oil market next year, driven by demand recovery in China, as well as supply disruption from El Nino.

DBS&rsquo revised target price implies a 12 times price-to-earnings (P/E) multiple based on FY2024 estimates, which factors in the group&rsquo s earnings prospects.

In the analyst&rsquo s view, any temporary earnings weakness in FY2023 has already been priced in.

&ldquo We believe Wilmar&rsquo s current share price, which is close to the pandemic level, doesn&rsquo t value Wilmar&rsquo s developing integrated food products platform, especially its downstream branded products and central kitchen expansion.&rdquo

Maybank said it expects Wilmar&rsquo s net profit after tax (NPAT) to &ldquo decelerate further&rdquo when the group reports its Q2 FY2023 results in August.

This comes on the back of soft services demand in China, and falling palm oil prices which may affect margins, said Maybank analyst Thilan Wickramasinghe.

Such factors should limit Wilmar&rsquo s room for positive earnings momentum in FY2023, he said.

Maybank&rsquo s lower target price accounts for higher borrowing costs, as well as a target P/E ratio of 26 times.

While Wickramasinghe noted that the stock trades at a forward P/E discount of 78 per cent to its listed Chinese subsidiary Yihai Kerry, and a discount of 83 per cent to its India listing through Adani Wilmar, the analyst said he does not see a catalyst for this gap closing in the medium term.

This is because investors in China and India are able to participate directly in their respective countries&rsquo growth through Wilmar&rsquo s listed subsidiaries, he said.

The analyst nonetheless raised the group&rsquo s NPAT estimates for FY2023-2024 by 10 per cent to 13 per cent to factor in higher margins in the feed and industrial segment, as well as higher volumes in the plantations and sugar segments due to a seasonally stronger H2 FY2023.