Wilmar's sales volume rises but earnings fall

Workers collect palm oil fruits inside a palm oil factory in Sepang, outside Kuala Lumpur, in this February 18, 2014 file photo. Wilmar is expected to report full-year results this week. REUTERS/Samsul Said/Files GLOBAL BUSINESS WEEK AHEAD PACKAGE - SEARCH 'BUSINESS WEEK AHEAD FEBRUARY 15' FOR ALL IMAGES

KUALA LUMPUR: PPB Group Bhd’s associate Wilmar International Ltd’s core net profit fell 4.4% to US$1.166bil (RM4.85bil) for the full year ended Dec 31, 2015 (FY15) mainly due to translation losses on the back of weaker regional currencies against the US dollar.

Announcing its unaudited financial statements to Singapore Exchange, the world’s largest palm and lauric oils said the group’s total sales volume for FY15 grew 10% to 65.3 million tonnes despite headwinds in the operating environment.

“The translation losses, coupled with the mark-to-market losses arising from the group’s investment securities, reduced the overall net profit to US$1.1bil (RM4.57bil) (FY14: US$1.2bil),” said the company, which trades almost half the world’s palm oil.

Wilmar’s core net profit sank 15% year-on-year to US$350.42mil (RM1.46bil) in the fourth quarter of 2015, affected by the weak performance in tropical oils.

It said the group’s core net profit continued to be driven by strong performance from the oilseeds and grains (including consumer products) and sugar segments, which recorded strong profit growth of 39.6% and 49.3% respectively.

“This was achieved through higher volume and overall margin expansion from both the group’s soybean crushing and consumer products businesses,” it said.

Wilmar said it achieved record volume of 12 million tonnes in oilseeds crushing operations.

“Global packed oil sales for the group and its Asian and African joint ventures exceeded 8 million tonnes for the first time,” it added.

PPB Group owns 18.3% of Wilmar according to its latest annual report, but the group considers Wilmar an associate by virtue of its ability to exercise significant influence over Wilmar’s financial and operating policy decisions through board representation.