Olam: Co has issued a report in SGX as well as a note from HSBC disputing CLSA’s analyst report. They state that co is not the only player to enjoy Nigerian incentives and that financial statements are not of any concern. CLSA’s est that incentives account for 30-40% of profits and Olam’s exclusivity to incentives are incorrect, Nigerian incentives only account for slightly less than 1% of rev with almost all incentives passed on to suppliers...
In each product, an est 4 or 5 other exporters would also experience similar incentives. The reports also explain that accounting differences are due to reclassifications and differential accounting treatment at the subsidiary levels which have to be re-presented at the consolidated level. All of these which have no impact on profits.
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