Wilmar International - UOB Kay Hian 2024-02-22: 2023 Results Above Expectation

• Wilmar’s 2H23 results came in above expectations, largely driven by strong sales volume in China and firm sugar pricing.
• Although we expect earnings improvement for 2024 on better sales volume and margin improvement from China operations, Wilmar's share price performance may remain lacklustre due to Wilmar’s association with the recent China palm oil fraud.
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Results above expectations.

• Wilmar International (SGX:F34) reported 2H23 core net profit of US$748m (+34% q-o-q, -41% y-o-y) after excluding a disposal gain of associates at US$241.3m, bringing 2023 core net profit to US$1.33b (-41% y-o-y). This is above our and consensus expectations.
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• Plantation & sugar milling segment: Higher-than-expected sugar sales volume.
• Note that Wilmar’s overall performance improved h-o-h, with stronger operating margin registered especially from its China operation as well as benefitting from the good raw sugar pricing.
• Some other key highlights from Wilmar’s 2H23 results are:
  1. Strong sugar milling: Earnings increased h-o-h and y-o-y on the back of firm sugar prices and higher sales volume.
  2. Food products: Earnings improved h-o-h and y-o-y with higher sales volume for its medium pack and bulk products (especially flour and rice sales).
  3. Feed and industrial products: Earnings increased h-o-h with oilseeds division recording higher crushing margin and higher sugar merchandising volume.

FY23 dividend of S$0.17

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Leow Huey Chuen UOB Kay Hian Research | Jacquelyn Yow Hui Li UOB Kay Hian | https://research.uobkayhian.com/ 2024-02-22 SGinvestors.io

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