Olam reports 14.9 per cent increase in net profit in first half of 2012 financial year

Olam International Limited, a leading global, integrated supply chain manager and processor of agricultural products and food ingredients, reported on 14 February profit after tax of around US$147.4 million for the half year ended 31 December 2011. The figure marked an increase of 6.4 per cent over the previous corresponding half year and operational profit after tax and minority interests of US$128.4 million, up 14.9 per cent over the first half of the 2011 financial year. The company noted in a press release that the Confectionery & Beverage Ingredients segment registered strong growth during the period with the cocoa business continuing to grow in volume. The company reported that it expected to meet its procurement targets despite forecast of a short crop this year. The company noted that the coffee business in the Central Andean region saw a turnaround during the period and is now expected to start contributing to earnings from this year onward. The company also noted that the soluble coffee factory in Vietnam registered strong performance

Overall, the company's sales volume registered strong growth of 15.8 per cent year-on-year to 4.52 million metric tons. Net Contribution (NC) improved 18.5 per cent to US$479 million during the half year.  

“Our first half of the 2012 financial year results reflect the resilience of the Olam model as we have continued to deliver positive operating results, even in periods of uncertainty and volatility in many global markets,” Olam’s Group Managing Director and CEO Sunny Verghese commented in a press release. “The food and food-related segments of our business continue to demonstrate robust growth across businesses, geographies and value chain activities. This strong performance has helped to offset the results achieved in our industrial raw material business which is more recession-sensitive, and therefore continues to face demand and margin pressures.”

Olam’s Group CFO, Krishnan Ravikumar explained the results: “Our first half of the 2012 financial year performance amidst a period of stress and volatility provides further validation of our strategy. We continue to focus on growing our business, both organically in our supply chain core and through acquisitions in the mid and upstream segments of the value chain. Our growth ambitions are supported by a strong and resilient balance sheet with adequate liquidity and the flexibility to perform across cycles.”

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