- Wilmar’s 3Q23 results came in well within our expectations, but lower than the market’s forecast. The q-o-q improvement was mainly due to:
- higher sales volume of the feed & industrial products segment, and
- - Read this at SGinvestors.io -
- However, the y-o-y decline in earnings was mainly due to the normalisation of tropical oil refining margins in 3Q23.
- Maintain HOLD on Wilmar with a target price of S$3.80.
Wilmar's 3Q23 results within expectations
- Wilmar International (SGX:F34) reported 3Q23 core net profit of US$324m (+85% q-o-q, -59% y-o-y), accounting for 79% of our full-year forecast. This is within our expectation, but lower than market’s forecast.
3Q23 earnings higher q-o-q.
- - Read this at SGinvestors.io -
3Q23 and 9M23 earnings declined y-o-y
- 3Q23 and 9M23 earnings declined y-o-y largely due to the weaker performance from the tropical oils and fertilisers subsegments.
- Recall that Wilmar achieved record-breaking earnings in 3Q22, primarily due to significant contribution from the tropical oils sub-segment. This exceptional performance was driven by a record-high processing margin, which was the result of crude palm product prices decreasing more than refined palm products. This drop in prices was influenced by Indonesia's palm oil policies.
- Since 1Q23, palm downstream processing margins have returned to normal. We thus expect tropical oil refining margins to normalise and lead to weaker performance in 3Q23-4Q23.
Wilmar's results highlights
- Read more at SGinvestors.io.
