Commodities player Wilmar International's coffers suffered as tough conditions in the palm oil market and losses from associates dented its earnings.
The world's biggest palm oil producer and trader reported a 22 per cent drop in its second quarter net profit to US$170.7 million (S$213.20 million) yesterday.
Earnings fell in the three months to June 30 despite revenue creeping up 0.9 per cent to US$10.5 billion.
The company said the lower net profit was mainly due to margin contraction in its palm business, which had to deal with excess refining capacity and tighter supplies of crude palm oil.
The palm and laurics business recorded a 4 per cent decline in sales volume to six million metric tonnes in the quarter.
Despite lower sales volume, revenues for the segment grew to US$5.3 billion due to higher palm prices.
Wilmar's associates recorded a pre-tax loss of US$4 million compared with a pre-tax profit of US$24.9 million mainly due to lower contributions from its associates in China.
Net profit for the half year plunged 38 per cent to US$332.5 million, while revenue recorded a 0.8 per cent uptick to US$20.8 billion.
Earnings per share was 2.7 US cents in the second quarter, down from 3.4 US cents in the same period a year ago.
Net asset value per share was US$2.371 as at the end of June, up from US$2.345 at the end of December.
Chief executive Kuok Khoon Hong said in a statement that he expects a much better performance in the second half this year.
The company's board has proposed an interim dividend of two Singapore cents per share.
Wilmar shares closed unchanged at $3.24 on Thursday. It reported its earnings after markets closed.
This article was first published on August 08, 2014.
Get a copy of The Straits Times or go to straitstimes.com for more stories.