Wilmar (SGX:F34)’s 1Q26 results disappointed. With the ongoing Middle East conflict, higher commodity prices would be somewhat offset by the steeper costs of freight, fertiliser and packaging, while demand destruction could also be an issue.
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1Q26 core profit below expectations
1Q26 core profit (-23% y-o-y, -21% q-o-q) was below expectations, accounting for 17-18% of our and Street full-year forecasts. This was from unrealised mark-to-market hedging losses (caused by sharp spikes in commodity prices), as well as weaker contributions from the plantation and sugar milling segments. Offsetting this was a more than US$30m gain on disposal of a joint venture in China in 1Q26.
Going forward, Wilmar expects the hedging losses to reverse in the coming quarters, once physical transactions are settled.
Management continues to see stable volumes in China (which comprises the bulk of its earnings), although it has seen demand destruction in India and other price-sensitive countries in 2Q26. Nevertheless, it maintains its single-digit volume growth target for FY26, coming from market share improvements.
Feed and industrial segment sales volume -9% q-o-q (+12% y-o-y)
Read more at SGinvestors.io.
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