SINGAPORE: Wilmar International, the world's largest listed palm oil PLANTATION [] firm, posted an unexpected 15 percent decline in its second-quarter net profit, hit by losses on convertible bonds and weaker margins.
The company, which has plantation estate in Indonesia and a number of edible oil processing facilities in China, said it remains positive on the prospect of Asian economies and is planning a major expansion into sugar.
Wilmar said the second quarter net profit was affected by a negative change in valuation of $41.7 million for convertible bonds as its share price slumped.
Margins for merchandising and processing of palm oil and related products were lower due to tighter supply of crude palm oil and the uncompetitive pricing of palm oil versus other edible oils, it said in a statement.
Wilmar is making a big bet on sugar with an offer to buy Sucrogen, the sugar assets of Australia's conglomerate CSR (CSR.AX) in a $1.5 billion deal.
The acquisition is expected to enable Wilmar to maintain its high growth while it also speeds up the development of its 200,000 hectares of land in Indonesia's Papua, dedicated for sugar plantation.
"The group is planning a major expansion into sugar with the proposed acquisition of Sucrogen Ltd and the development of sugar in Indonesia," CEO Kuok Khoon Hong said in a statement.
"This is expected to be a significant contributor in the long term."
Kuok, ranked fourth on Forbes' Singapore rich list, is a nephew of Malaysian billionaire Robert Kuok. The family controls the second largest company in Singapore bourse.
Wilmar also reiterated that it was still in talks to buy a minority stake in a small Indonesian palm oil plantation Kencana Agri Ltd. Sources told Reuters that Wilmar plans to buy 20 percent stake in Kencana.
Wilmar, which has a market value of $29 billion, posted its lowest profit in two years as it earned $344 million for the quarter ended June, down from $407 million posted last year and analysts forecast of $417 million.
Its revenue climbed 18 percent to $6.8 billion for the April-June quarter.
Wilmar shares have declined 2.5 percent since the start of the year, underperforming the broader Singapore market .FTSTI which gained 1 percent.
Some analysts said the ongoing investigation of tax fraud allegation on the company by Indonesian authorities have weighed the share prices. - Reuters
The company, which has plantation estate in Indonesia and a number of edible oil processing facilities in China, said it remains positive on the prospect of Asian economies and is planning a major expansion into sugar.
Wilmar said the second quarter net profit was affected by a negative change in valuation of $41.7 million for convertible bonds as its share price slumped.
Margins for merchandising and processing of palm oil and related products were lower due to tighter supply of crude palm oil and the uncompetitive pricing of palm oil versus other edible oils, it said in a statement.
Wilmar is making a big bet on sugar with an offer to buy Sucrogen, the sugar assets of Australia's conglomerate CSR (CSR.AX) in a $1.5 billion deal.
The acquisition is expected to enable Wilmar to maintain its high growth while it also speeds up the development of its 200,000 hectares of land in Indonesia's Papua, dedicated for sugar plantation.
"The group is planning a major expansion into sugar with the proposed acquisition of Sucrogen Ltd and the development of sugar in Indonesia," CEO Kuok Khoon Hong said in a statement.
"This is expected to be a significant contributor in the long term."
Kuok, ranked fourth on Forbes' Singapore rich list, is a nephew of Malaysian billionaire Robert Kuok. The family controls the second largest company in Singapore bourse.
Wilmar also reiterated that it was still in talks to buy a minority stake in a small Indonesian palm oil plantation Kencana Agri Ltd. Sources told Reuters that Wilmar plans to buy 20 percent stake in Kencana.
Wilmar, which has a market value of $29 billion, posted its lowest profit in two years as it earned $344 million for the quarter ended June, down from $407 million posted last year and analysts forecast of $417 million.
Its revenue climbed 18 percent to $6.8 billion for the April-June quarter.
Wilmar shares have declined 2.5 percent since the start of the year, underperforming the broader Singapore market .FTSTI which gained 1 percent.
Some analysts said the ongoing investigation of tax fraud allegation on the company by Indonesian authorities have weighed the share prices. - Reuters
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