Olam shares close 7.7% lower after H1 continuing operations profit and revenue decline
It posts an almost-six-time rise in net profit to S$1.9 billion for its first half year ended Jun 30
Olam Group's shares fell by as much as 8.5% on Friday morning following the release of its H1 results. At 9:10 am, the stock was trading at its intra-day low of S$1.19, which is 8.5% or S$0.11 lower compared to its previous price. Later, the shares recovered slightly and ended the day 7.7% or S$0.10 lower at S$1.20. The company reported an almost-six-fold increase in net profit to S$1.9 billion for the first half of the year ended Jun 30, compared to S$323.8 million in the previous year.
This growth was fueled by a substantial one-off gain of about S$1.8 billion resulting from the divestment of the company's 44.58% stake in agribusiness unit Olam Agri and the entire IT and digital services unit Mindsprint. Additionally, Olam Group recognized an accounting gain on the valuation of its remaining stake in Olam Agri.
However, the company's net profit from continuing operations in the remaining Olam Group and food ingredients arm, ofi, declined by 66% during the six-month period to S$55.6 million, down from S$163.7 million in the same period a year earlier. The decline in revenue was also significant, with a 18.3% drop to S$12.5 billion, compared to S$15.3 billion in the corresponding year-ago period.
The decrease in revenue was primarily attributed to the sharp drop in input prices for ofi, particularly cocoa and coffee, along with reduced volumes in the remaining Olam Group.
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