Olam: UBS maintains Buy and note that Food segment continues to be defensive and earnings growth continued to be driven by the Food segments, with H1 net contribution from Food growing 32% yoy on back of higher sales (+18%) and net contribution per tonne margins (+12%).
On the other hand, while sales increased 7% for Industrial raw materials, net contribution declined 24% as margins went down by 29%. The results highlight the defensive nature of Olam’s overall business, with the cyclical Industrial raw materials division (cotton, timber) accounting for less than 25% of earnings.
Olam remains as house top pick among Singapore traders. Reiterate our view that Olam should continue to deliver robust earnings growth higher than its peers, in the current volatile environment.
No comments:
Post a Comment