Wilmar International, the Singapore-based agribusiness and food group, has reported sharp increases in profitability and revenues from its first half 2020 trading, as the Covid-19 pandemic increased retail food demand.
“We are cautiously optimistic that our second half performance will be satisfactory,” advised Wilmar chairman and chief executive Kuok Khoon Hong. “The COVID-19 pandemic has severely impacted the global economy and brought about significant disruptions and market volatility in the countries where the Group operates.
“We have been fortunate that our operations have not been significantly impacted as the Group’s business is predominantly in the production and distribution of essential food products. Further, China, the country where the Group has the largest operations, has recovered from this pandemic earlier than most countries.
"Both our Food Products and Feed and Industrial Products segments did well in first half 2020, on the back of strong recovery in the second quarter and are expected to continue to perform well for the rest of the year. The recent increase in palm prices will also contribute favourably to our Plantations business.” Mr Hong concluded.
Wilmar saw a 50% improvement in net profit to $610.9m on revenues that were 12% higher at $22.66 billion from the six months to June 30th 2020, compared to $407.9m and $20.23bn at the same stage of 2019. All the conglomerate’s core segments made a positive contribution.
The pandemic saw sales of the Consumer Products segment increase significantly as people ate more often at home and also bought higher quality products. This was partially offset by lower sales in the medium pack and bulk businesses, as food service and catering demand was weak during lockdown in major markets.
Chinese demand recovers from ASF
The Feed and Industrial Products segment, covering tropical oils, oilseeds & grains and sugar) saw a 105% increase in pre-tax profit to $370.8m. Oilseeds & Grains benefitted from demand recovery in China after last year’s African swine fever outbreak, resulting in strong crush margins and volumes.
Sugar merchandising activities also improved, helping to offset a lower performance from the Tropical Oils business.
The Plantation and Sugar Milling segment returned a smaller loss than a year earlier – a negative $82.9m compared to $103.5m. This was due to stronger palm oil prices in the period.