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Wilmar profits soar, as ag prices rally

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Asian agriculture giant Wilmar reported a jump in profits, as rising sugar and palm oil prices increase its revenue.

And the company issued an upbeat outlook for 2016, as it eyes opportunities in China.

Wilmar reported a jump in its core profit to $589.50m, up 70% year-on-year in the last three months of 2016.

The rise in profits was driven by better performance across the company, particularly in sugar and palm oil, as well as a one-off tax recognition from the company's Indonesian operations.

Company revenue grew 27% year-on-year, to $11.95bn, which Willmar ascribed to "higher commodity prices and stronger sales volume".

Palm oil, sugar boost

Profits at Wilmar's tropical oils segment soared 94%, thanks to higher crude palm oil prices, and higher oil yields, which outweighed lower palm fruit production due to replanting at the company's plantations.

And Wilmar's sugar business reported a 68% increase in pre-tax profits.

"The milling business delivered an outstanding set of results, helped by higher sugar prices as well as the season extension for milling activities, which led to higher volume of cane crushed."

Profits from the company's oilseed processing, and consumer products segment rose as well.

Chinese opportunities

Kuok Khoon Hong, Wilmar's chairman and chief executive, said "the strong performance in the fourth quarter enabled the group to overcome the losses incurred in the second quarter of the year and achieve satisfactory performance for the full year."

And Mr Kuok was upbeat on prospects, with potential to expand the company's Chinese crushing.

"Looking ahead, the recent lifting of restrictions in China on oilseeds and grains processing on foreign companies is expected to benefit our operations."

By William Clarke

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