Wilmar International - OCBC Investment 2024-02-26: Some Improvements In 2H23

• Wilmar (SGX:F34)’s 2H23 revenue fell 7.1% y-o-y to US$34.6b, dragged by weaker performance from the Feed and Industrial Products. 2H23 PATMI and core PATMI (excluding non-operating items and changes in fair value of biological assets) declined 21.3% and 21.7% y-o-y to US$973.9m and US$989.3m respectively.

Core net profit excluding the disposal gain met our expectations

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• Excluding the disposal gain of US$224m for its Moroccan associate in 2H23, FY23 core PATMI would come in at US$1.3b, in-line with our expectation.

Dividend ahead of our expectation

• See Wilmar's dividend dates. Despite weaker earnings in FY23, a final dividend of S$0.11 per share was declared (same as last year), bringing the total dividend for FY23 to S$0.17 per share (flat y-o-y), ahead of our expectation of S$0.165.

Stronger h-o-h performance in 2H23 as we had expected

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• Feed and Industrial products PBT fell 50% y-o-y in 2H23 due to weaker margins in tropical oils but improved h-o-h by 32% as crushing margin recovered in 2H23.
• For Food products, PBT grew 2% y-o-y or 157% h-o-h to US$212.3m in 2H23, due to stronger sales volume from medium pack and bulk products though the operating environment in China has been weak.
• Plantation and Sugar Milling’s PBT was more than three-fold y-o-y or ~7x h-o-h to US$437.2m in 2H23, driven by higher sugar prices, disposal gain of its Moroccan associate and better volumes for both palm oil and sugar.

Looking ahead…

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OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2024-02-26 SGinvestors.io

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