Olam International reports drop in six-month earnings

Olam International has reported a fourth quarter (Q4) and six-month (H2) drop in earnings in its financial report for 2014. Olam reported a 12 per cent Profit After Tax and Minority Interest (PATMI) decrease to almost US$95 million in earnings for Q4 2014, compared to US$107 million in Q4 2013. The company statement attributed the drop in earnings to currency devaluation against the US dollar across major markets, including Russia, Nigeria, Brazil and Australia. “We continue to stay focused on executing our strategic plan while navigating carefully through the current macro-economic uncertainty and currency volatility, which we expect will continue through 2015,” said Sunny Verghese, Olam’s Co-founder, Group Managing Director and CEO, in a statement. Olam reported a 9.7 per cent PATMI decline to an earning of US$130 million in H2 2014, when compared to its H2 2013 earnings of almost US$144.5 million. The company statement attributed the six-month drop in earning to underperformance in Dairy farming in Uruguay, which offset growth in other areas, including coffee and cocoa. Olam reported an 11.6 per cent decline in sales volume for H2 2014, when compared to H2 2013. The company claims that this is part of its strategy. “We have made significant progress in our debt optimisation efforts, which will reduce our cost of borrowing on an ongoing basis,” said A. Shekhar, Olam’s Executive Director of Finance and Business Development, in the statement. Olam said the long-term trends in the agri-commodity sector remain attractive. The Singapore firm said it believes its diversified portfolio will provide resilience to navigate uncertainties in the global market.