not vested
Wilmar International: Good set of results; record DPS since listing
Wilmar’s 4Q19 overall sales volume grew 1.3% YoY, driven by more consumer products and sugar merchandising activities while revenue was up 0.5% YoY to US$11.3b due to lower commodity prices.
4Q19/FY19 PATMI increased by 122.3% and 10.2% YoY respectively.
A final dividend of 9.5 S cents per share (+36% YoY) was declared, bringing the total dividend for FY19 to 12.5 S cents per share (+19% YoY).
Wilmar continued to report strong performances across its key business segments this quarter except JVs & associates (PBT: -44% YoY):
1. Tropical Oils (PBT: +114% YoY)
2. Oilseeds and Grains (O&G) (PBT: +61% YoY) and
3. Sugar (PBT: +92% YoY).
In light of the COVID-19, management disclosed that they have not experienced any major disruptions to their business and supply chains in China given Wilmar’s exposure to China is mainly in the food products business and their well distributed nationwide plants in China.
The proposed YKA IPO is on track but is likely to face a slight delay due to COVID-19. We expect the listing date likely to be in 3QFY20 and anticipate a special dividend post IPO.
Despite the potential headwinds from COVID-19, we continue to like Wilmar for its diversification of products, beneficiary from Indonesia’s B30 program, and the impending IPO should remain as a potential near-term catalyst.
After adjustments, our fair value increases from S$4.26 to S$4.64. Maintain BUY.
Source: OCBC