Olam International reports steady performance despite market challenges
Olam International has reported a steady operating performance, recording $15.9 billion revenues for the first half of 2019, against $13.7 billion for the same period last year.
The company, which includes cocoa processing operations, saw second quarter EBITDA earnings growth of 14.1% to $351 million across its business due to positive results in its edible nuts and spices segments.
However, PATMI figures showed that profits for the first half of the year were down 8.5%, at $230 million, against $251 million for the same period in 2018.
Revenues declined 9.5% to $3.2 billion for the company’s confectionery and beverage ingredients interests, which the firm said was due to lower coffee prices and reduced sales volumes.
Co-founder and group CEO Sunny Verghese said: “We delivered a steady set of results amid growing political and macroeconomic uncertainties affecting most of our markets. We are pleased with the EBITDA growth during the first half of 2019, which reflects the effectiveness of our differentiated and defensible strategy.
“We are making good progress in executing our new Strategic Plan. We are investing in several new initiatives to offer differentiated solutions to our existing customers as well as develop new customer segments and channels. We also stay focused on streamlining our portfolio by recycling capital and focusing on high-growth businesses.”
In terms of its outlook, the company said that despite political and economic uncertainties are likely to affect global trading conditions in 2019, Olam believes its diversified portfolio provides a resilient platform to navigate the challenges in both the global economy and commodity markets.
Consequently, the business is executing on the four strategic pathways for growth as set out in the 2019-2024 Strategic Plan. It will strengthen, streamline and focus its business portfolio, drive margin improvement by enhancing cost and capital efficiency, generate additional revenue streams by offering differentiated products and services, and explore partnerships and investments in select new engines for growth.
Executive director and Group COO, A. Shekhar added: “We further strengthened our balance sheet during the first half of the year, with improved gearing and free cash flows. “We are well positioned for the second half of the year as we approach the peak of the procurement season for several of our commodities, with likely increases in working capital deployment. We will also stay focused on the divestment of the identified non-core assets as we complete our planned fixed capital investments, including the proposed acquisition of Dangote Flour Mills during this period.”