Wilmar registered improved operating performance across all core segments, except their Palm Plantation and Sugar Milling segments, which were negatively impacted by low palm oil and sugar prices.

Performance Drivers (Positive Factors)

• Tropical Oils (Plantation, Manufacturing & Merchandising)

Wilmar’s Tropical Oils (Plantation, Manufacturing & Merchandising) segment achieved a 37% year-on-year jump in pretax profit to USD 546.1 million in FY 2018. This increase was driven by higher contributions from the manufacturing and merchandising businesses – where sales volume rose 5% to 24.3 million metric tons (MT) in FY 2018 – as a result of consistently strong demand for biodiesel and downstream products. Further, the downstream business benefitted from lower feedstock costs due to declining commodity prices.

On the flip side, the lower palm oil prices led to smaller contributions from the plantation business. Nevertheless, favorable weather conditions saw production yield improve 10% year-on-year to 21.6 MT per hectare, while production of fresh fruit bunches rose 7% year-on-year to 4,189,728 MT.

• Oilseeds & Grains (Manufacturing & Consumer Products)

Wilmar’s Oilseeds & Grains (Manufacturing & Consumer Products) clocked a 20% year-on-year surge in FY 2018 pre-tax profit to USD 875.0 million, on the back of a 12% increase in overall sales volume to 37.2 million MT during the year. A large part of the increase was derived from the Consumer Products business, which saw a 10% rise in sales to 6.0 million MT in FY 2018. This segment also experienced improved crush margins and volume over the year.

Performance Drivers (Negative Factors)

• Sugar (Milling, Merchandising, Refining & Consumer Products)

Wilmar’s Sugar (Milling, Merchandising, Refining & Consumer Products) suffered a pre-tax loss of USD 123.0 million in FY 2018, compared to the loss of USD 24.6 million in FY 2017. This loss was mostly as a result of the USD 138.6 million impairment provision made for the company’s milling operations in Australia. Although the milling operations have been generating positive cash flows since acquisition, Wilmar decided to adopt a conservative approach in view of the declining sugar prices over the past year. There were also further losses from Wilmar’s newly-acquired Indian subsidiary, Shree Renuka Sugars, as it only commenced its operations in late October.

On a positive note, the Merchandising business in this segment experienced a 7% year-on-year improvement in FY 2018 sales volume to 11.7 million MT.

• Others

The Others segment registered a lower pre-tax profit of USD 19.9 million in FY 2018, compared to the USD 243.3 million recorded in FY 2017. This was chiefly due to lower investment income from Wilmar’s investment portfolio, as a result of high stock market volatility in FY 2018. Nevertheless, share of results of the company’s Joint Ventures & Associates grew by 36% year-on-year to USD 310.3 million in FY 2018, owing to higher contributions from Wilmar’s investments in China, Europe and Vietnam.