Olam International reported its results for the quarter and nine months ended September 30, 2015. Q3 Operational Profit After Tax and Minority Interest (Operational PATMI), which excludes exceptional items, increased 6.2% year-on-year to S$34.2 million.
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Reported PATMI declined 30% to S$31 million from S$44.3 million in the previous corresponding period due to exceptional items recorded during the two periods. In Q3 2014, Olam recorded a net exceptional gain of S$12.1 million while in Q3 2015, it recorded a net exceptional loss of S$3.2 million.
Sales volumes and revenues were up 3% and 4.0% respectively as Olam continued to grow in its prioritised platforms.
All segments registered growth except Food Staples & Packaged Foods, which faced lower volumes, prices and the continued underperformance of its upstream Dairy operations, leading to a 11.3% decline in overall Earnings Before Interest, Tax, Depreciation, and Amortisation (“EBITDAâ€) to S$194.6 million.
For 9M 2015, Olam achieved strong underlying growth as Operational PATMI increased by 41% YOY to S$258.0 million. Reported PATMI declined 66.8% to S$157 million largely due to exceptional items recorded during the two periods. In 9M 2015, Olam booked a net exceptional loss of S$101.0 million as against net exceptional gains of S$289.3 million in 9M 2014.
Sales volumes and revenue were lower by 17.2% and 8.7% respectively than a year ago as Olam continued to execute on its business strategy to grow in prioritised platforms while reducing volumes or exiting from lower-margin businesses.
EBITDA declined by 1.6% YoY to S$809.8 million mainly as a result of the decline in contribution from the Food Staples & Packaged Foods segment.
The 9M 2015 results included a higher net loss of S$31.5 million on the fair valuation of biological assets compared to a net loss of S$7.5 million in the prior corresponding period.
The group continued to execute its debt optimisation initiatives, with net financing costs down from S$369.7 million in 9M 2014 to S$327.6 million in 9M 2015. ■