The group expects to incur additional one-off and non-recurring expenses associated with the reorganisation plan in 2HFY2022 although these expenses for the full year are expected to be lower than the total recorded for 2021.
Earnings per share (EPS) for the 2HFY2022 stood at 10.35 from the 11.68 cents for 1HFY2021.
Olam’s revenue increased 24.6% y-o-y on higher prices across many products and commodities in the first half of the year.
EBIT grew 25.0% to $802.1 million mainly due to the strong earnings contribution from Olam Agri which contributed 75.9% of the total group EBIT, while Olam Food Ingredients (ofi) contributed 33% and the remaining was of Olam Group at -8.9%.
See also: Keppel Pacific Oak US REIT’s 1QFY2025 distributable income falls by 19.3% y-o-y to US$9.6 mil
Olam group CFO N Muthukumar said the company is pleased with the strong free cash flow generation of $465.7 million in 1HFY2022 along with a healthy cash position of $6.4 billion as well as ample available liquidity.
“Our discipline in managing our working capital needs amid rising commodity prices has enabled us to remain resilient,” he added.
The board of directors has declared an interim dividend of 4 cents per share for the period ended June.
See also: Keppel DC REIT reports 1QFY2025 DPU of 2.503 cents, 14.2% higher y-o-y
In its business outlook, the company noted that the significant demand growth rate and pick-up seen in 2HFY2021 has slowed down in 1HFY2022 after the geopolitical crisis, accompanied by the hard pandemic lockdowns in China.
Amid this, ofi continues to make targeted investments across its portfolio to support its private label thrusts and well positioned for 2022 as the revised sales pricing and margin recovery gathers pace in 2HFY2022.
Meanwhile, riding on its strong growth and outperformance in 1HFY2022, Olam Agri expects to deliver a better year-on-year performance for 2022 while navigating the heightened geopolitical and macroeconomic risks.
Overall, given the 1HFY2022 results and barring any unforeseen circumstances or unfavourable geopolitical, macroeconomic and pandemic developments, Olam is cautiously optimistic about its prospects for the rest of 2022, even as the industry continues to see strong underlying demand amid tight supplies.
As at 9.28am, shares in Olam are trading at an unchanged $1.57.
