(Reuters) -Singaporean food conglomerate Wilmar International missed expectations for first-half core net profit on Tuesday, hurt by weakness in its feed and industrial products segment.The company faced challenging global operating conditions and expects uncertainty around refining margins in its tropical oil business to persist, it said.
The tropical oils business is part of the feed and industrial products segment, which reported profit before tax at $381.6 million for the half year, down 29% from a year earlier.
The company blamed the decline on challenging operating conditions in the tropical oils business.
Core net profit stood at $583.7 million for the six months ended June 30, down from $606.3 million a year ago. That missed a Visible Alpha estimate of $655.2 million.
The results come at a turbulent time for the commodity trading powerhouse as it is caught up in a court case in Indonesia about alleged misconduct in obtaining palm oil export permits.
Wilmar in mid-April handed over 11.8 trillion rupiah ($724.82 million) to the country’s Attorney General Office as a “security deposit” in relation to the case, while an employee was arrested in the same month on graft charges.
Its joint ventures saw exits recently, with India’s Adani Group and UK’s PZ Cussons selling their stakes in AWL Agri Business and PZ Wilmar, respectively.
Its food product division, which includes consumer products, recorded higher profits on the back of strength in its flour and rice divisions in China as well as higher sales volumes.
Wilmar’s revenue for the half-year rose 6.3% to $32.89 billion.
The company declared an interim dividend of S$0.04 apiece, lower than S$0.06 per share paid out a year ago.
“We are cautiously optimistic that the performance of our core segments will be satisfactory,” said Kuok Khoon Hong, chairman and CEO of Wilmar, referring to fiscal year 2025.
($1 = 16,280.0000 rupiah)
(Reporting by Roshan Thomas and Nichiket Sunil in Bengaluru; Editing by Rashmi Aich and Devika Syamnath)
