Olam Reports Robust 2020 Performance Amid The Pandemic, With 36.0% Growth In Operational PATMI to S$677.8M

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Strong operating performance by new Operating Groups

  • H2 2020 Operational PATMI up 90.1% to S$475.7 million
  • Lower reported PATMI in H2 2020 (-S$87.0 million) and 2020 (S$245.7 million) from prudent one-off impairment mainly from Olam Palm Gabon (OPG)
  • Strong operating performance growth of 43.3% for OFI in H2 2020 after Covid-19 impact in H1 2020
  • Strong operating performance growth of 40.3% for OGA in 2020
  • Significant progress on Re-organisation Plan with planned IPO of OFI by H1 2022 and de-merger from Olam Group in conjunction with the IPO; Pursuing similar strategic options for OGA in parallel
  • The Board of Directors recommends a final dividend of 4.0 cents per share; the total dividend for 2020 would be 7.5 cents per share (2019: 8.0 cents)

Olam Co-Founder and Group CEO, Sunny Verghese said:

“We delivered strong growth in Operational PATMI of 36.0% to S$677.8 million for 2020, reflecting the strength of our operating groups and their constituent businesses.

We delivered this strong set of results while achieving significant progress in our transformative Re-organisation Plan and we are excited about the sustained value creation potential arising from this re-organisation.

Olam reports resilient performance in H1 2020, with 44.4% growth in PATMI amid Covid-19

“Our success is underpinned by a radically different sustainability offering, enabled by technology that has strengthened our strategic partnerships with our customers. This performance is also a result of the skill and resourcefulness of our team to capture market opportunities, strong risk management discipline and demonstrated operational capability.

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“We are particularly pleased to have successfully navigated through Covid-19 thus far by focusing on the safety and well-being of our employees, ensuring food safety to our customers, robust business continuity plans in each of our sites and locations, managing through demand, supply and financial shocks, and partnering with our communities to support them with Covid-19 assistance and resilience measures.

“We are seeing market conditions and sentiments beginning to improve as economies snapback from the worst impacts of Covid-19 in 2020 and we expect this favourable market environment to continue to improve in 2021.”

Olam Group Financial Performance

Global food and agri-business, Olam Group, today reported strong results for H2 2020 and 2020, with solid progress on its Re-organisation Plan, announced in January 2020.

H2 2020

  • Revenue increased by 9.9% year-on-year (YoY).
  • Operational PATMI grew 90.1% to S$475.7 million. However, due to one-off exceptional
    items reported PATMI was negative at S$87.0 million.

2020

  • Revenue increased by 8.6% YoY. OGA contributed 60.1% of total Group revenue, OFI 35.0%, and OIL 4.9% respectively.
  • Operational PATMI grew 36.0% to S$677.8 million. However, due to net exceptional items, reported PATMI was down 22.3% to S$245.7 million
  • Exceptional items include the one-off and non-cash impairment charge of S$483.9 million on our investment in OPG; partly offset by gains from divestments of deprioritised assets.
  • EBIT increased 1.2% to S$1.1 billion as the growth in contribution from OGA was offset by the reduced contribution from OIL: OFI’s results were resilient and contributed to 72.1% of total Group EBIT, OGA contributed 43.2% share, and OIL -15.3%.
  • FCFE negative at S$592.2 million on the increased deployment of working capital due to higher volumes as well as higher commodity prices
  • Net gearing increased to 1.72 times with an adjusted gearing of 0.63 times net of readily marketable inventory and secured receivables.

Olam Cocoa hits 100% traceability target across its direct global supply chain
Olam Cocoa hits 100% traceability target across its direct global supply chain – www.brandspurng.com

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