- Wilmar (SGX:F34)’s recent 2Q24 shows a silver lining in tropical oils recovery. However, its Food Products segment has softened due to persistent tightening margins amidst falling commodity prices and weak demand, particularly in China.
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Minor improvements, but margins compressed
- We think the prospect of a turnaround is some way off, at least until China’s recovery is on a better footing.
- With Wilmar's new businesses such as central kitchens being slow in progress, material earnings contribution remains some way off.
Food Products conditions challenging
- In Wilmar's recent 2Q24 release, Food Products saw volumes declining at -9% q-o-q (vs. 5% 1Q24), with both Consumer Products and Medium Pack Bulk segment experiencing stagnation. This is reflective of weak consumer activity in China.
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Industrial segments supported by crushing margins
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