Olam Group has reported an increase in earnings before interest and taxes (EBIT) in the first half of 2023 compared to the same time period in 2022.
The company’s EBIT increased 1.1 per cent to US$819.6 million.
“The focused and differentiated strategies of our operating groups will continue to allow us to capture opportunities across the food, feed and ingredients space,” says Olam Group Co-Founder and CEO Sunny Verghese.
Underlying net profit decreased by 61.6 per cent to US$184 million, while free cash flow to equity was negative $483.7 million on higher working capital, net interest costs, and capital expenditure.
“We have been budgeting for higher interest costs and optimising cost structures overall,” says Olam Group CFO N Muthukumar. “We are however not immune to near-term impact from rapid benchmark interest rate hikes affecting companies globally. Some of the higher interest costs will be recovered through an increase in selling prices as we reprice our contracts, putting us in a better position for the second half.”
Revenue for Olam Agri, the company’s agri-business, decreased by 16.3 per cent to US$16.3 billion from reduced sales volumes and a normalisation of commodity prices from the highs compared to the first half of 2022.
“Olam Agri continues to target a first-of-its kind dual-listing in Singapore and Saudi Arabia by H1 2024, subject to receiving all requisite approvals and prevailing market conditions,” says Verghese.
The full half-yearly report can be found here.