Wilmar

Wilmar: Good set of 4Q12 results, which was at the higher end of estimates. Rev at US$11.6b, +1% yoy and -7% qoq, while net profit at US$400.9m, +52% and +3% qoq. Result brings FY12 rev to US$45.5b, +2% and core net profit to US$1.2b, -23% & PBT margins at 4.7% vs 5.9%. Most key segments delivered higher profit from operations in 4Q12, with the exception of Plantations & Palm Oil Mills which was affected by lower CPO price, while grp saw higher sales vol in Palm & Laurics, Consumer Products and Sugar, reflecting the general trend of palm oil and sugar price. Notably, grp’s Oilseeds & Grains posted a pretax profit of US$46.2m vs US$1.7m in 4Q2011 mainly due to improved crush margins. Sales vol was down 14% to 5.3m MT as a result of the excess oilseeds crushing capacity in China, partially offset by strong growth in flour. Going forward, grp note that the Group performed satisfactorily in 2012 despite the challenging operating environment for oilseeds and grains as well as declining CPO prices. Whilst uncertainties in the global economy remain, cautiously optimistic of our long term prospects due to good economic growth in main markets of China, India and Indonesia. Separately, Noble Grp announced the sale of a 53.74% equity interest in Noble Plantations to Wilmar. On completion, JVCo will be 53.74% owned by Wilmar and 46.27% owned by Noble. JVCo presently owns a majority interest in PT Henrison Inti Persada, which in turn owns 22,953 Ha of land for palm production in Papua, Indonesia. News could be positive, for both grps, with Noble leveraging on Wilmar’s expertise and supply china in the CPO segment. Individual division performances on Wilmar as follow: 1) Merchandising & Processing: Pretax profit grew 80% to US$195.0m mainly from improved margin and increased sales vol. Sales vol +21% to 6.5m MT as a result of an expanded capacity and stronger demand. Oilseeds & Grains posted a pretax profit of US$46.2m vs US$1.7m in 4Q11 due to improved crush margins. Sales vol was down 14% to 5.3m MT as a result of excess oilseeds crushing capacity in China, partially offset by growth in flour. 2) Consumer Products: Consumer Products recorded a 22% increase in pretax profit to US$40.6m on the back of lower feedstock cost. Sales volume increased by 1% to 1.2 million MT during the quarter. The growth in sales volume was driven primarily by stronger demand for flour and rice. 3) Plantations & Palm Oil Mills: Excluding a revaluation gain from biological assets of US$28.8m, pretax profit for the qtr, -23% to US$87.3m, driven by lower ASP. Grp’s production of fresh fruit bunches increased by 12% to 1.3m MT reflecting an improvement in production yield and an increase in mature hectarage. Yield +4% to 5.6 MT per ha resulting from high crop trend in Sabah and Sumatra. 4) Sugar reported an 8% increase in pretax profit to US$106.7m. Excluding non-operating items, pretax profit from operations surged to US$106.3m from US$29.6m in 4Q11. 5) Others segment saw an increase of 25% in pretax profit to US$30.9m due to higher gains from investment securities and higher shipping profit, partially offset by weaker fertiliser performance.