FY2013: Financial Highlights
- PBT up 13.4% to S$496.7 million.
- PATMI down 2.2% to S$362.6 million on higher tax charges.
- Sales Volume up 49.5% to 16.0 million metric tonnes; Sales Revenue up 21.7% to S$20.8 billion, with a 16.9% increase in Net Contribution (NC) to S$1,615.8 million.
- EBITDA grew by 18.2% to S$1,170.8 million.
- EPS of 14.36 cents/share, versus 14.96 cents/share in FY2012.
- Board recommends a final dividend of 4.0 cents per share.
^ Refer to details on page 1 of the Company’s FY2013 Financial Statements.
* Based on weighted average number of shares of 2,390,213,869 for FY2013 (compared to weighted average number of shares of 2,436,958,798 for FY2012)
** Based on weighted average number of shares of 2,390,213,869 for Q4 FY2013 (compared to weighted average number of shares of 2,436,074,814 for Q4 FY2012)
Olam International Limited (“Olam”, “the Group” or “the Company”) today reported its full year results for FY2013 with Profit Before Tax (PBT) up 13.4% to S$496.7 million. Profit After Tax and Minority Interest (PATMI) was S$362.6 million compared to S$370.9 million in FY2012. Excluding exceptional items, PATMI decreased by 2.0% to S$348.6 million, compared to S$355.5 million in FY2012.
For the three months ended June 30, 2013 (“Q4 FY2013”), PBT grew by 25.4% to S$133.7 million following a 26.2% increase in Sales Revenue and a 24% increase in Sales Volume. PATMI declined by 48.1% year-on-year to S$56.8 million, which included the impact of higher tax charges of S$50.6 million recognised in Q4 FY2013 compared to a net tax credit of S$8.2 million in Q4 FY2012.
For the full year FY2013 Sales Revenue increased 21.7% to S$20.80 billion. Sales Volume was up 49.5% to 16.0 million metric tonnes. Overall, NC (defined as Gross Profit less working capital interest) rose 16.9% to S$1,615.8 million.
Full year tax charges were up from S$34.1 million in FY2012 to S$105.1 million in FY2013, primarily due to (a) increased business and PBT contribution from higher tax jurisdictions; (b) one-off and non-recurring tax charges of S$12.8 million resulting from the sale of the Basmati rice mill in India and the sale-and-leaseback of almond orchards in the US; and (c) tax credit received in the previous year.
The Group’s Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) for the year grew by 18.2% to S$1,171 million versus S$991 million in the previous year. EBITDA returns on average Invested Capital (“IC”) remained constant at 11.4%. As highlighted in the Group’s strategy review earlier this year, EBITDA and return on IC are being provided as underlying indicators of operating cash flow and returns respectively.
During the year, the Group generated Operating Cash Flow (before changes in working capital) of S$1,074 million versus S$894 million in the previous year. Net gearing was 1.93 times, as compared to 2.20 times at the end of Q3 FY2013 and marginally higher than the 1.81 times in FY2012.
Olam’s Group MD & CEO, Sunny Verghese said: “Our headline results were dampened somewhat by the impact of increased tax charges versus last year and challenging market conditions which emerged in Q4 and affected some parts of our business. Despite this, underlying performance in most segments was robust overall, reflecting the strength of our business model and diversification in the sources of earnings across our platforms and geographies.
“We see this as a transition year and we are three months into our strategic plan implementation. We remain focused on the twin goals of pursuing profitable growth and sustained cash flow generation,” he said.
Olam’s Executive Director of Finance and Business Development, A. Shekhar said: “We are pleased with the earnings performance across our segments, especially considering the overall macroeconomic uncertainty as well as increased volatility in the agri-commodity sector.
“We continue to see robust EBITDA growth from the investments that we have already made and are focused on achieving our targeted returns (EBITDA/Average IC) and free cash flow.”
The Board of Directors recommends a dividend of 4.0 cents per share for the year.
While the long term trends in the agri-sector remain attractive, the nearer term macroeconomic uncertainty and increased volatility could impact the sector. The Company’s diversified portfolio with leadership position in many of its segments provides a resilient platform to navigate the uncertainties in the global markets. The Company’s strategy for the plan period from FY2014 to FY2016 has already been announced and the focus remains on execution and extracting full value from investments already made and generating positive cash flow.
Mr Shekhar said: “The task ahead is to ensure reliable execution against our plans, deliver the full cash flow potential from these investments, while slowing down the pace of new investments as announced in our strategy review.”
This release should be read and understood only in conjunction with the full text of Olam International Limited’s FY2013 Financial Statements lodged on SGXNET on August 29, 2013.
Please click on the pdfs on the right hand side to access the full press release, financial statements and presentation on the announcement.