InvestIdeas

not vested

Wilmar Q2 profit surges on oilseeds and grains business

SINGAPORE: Singapore-listed commodity trader Wilmar International Ltd posted a five-fold rise in second-quarter net profit, helped by its oilseeds and grains segment that benefited from higher volumes and crush margins.

The company, whose top shareholders include U.S. agricultural trader Archer Daniels Midland Co, reported a net profit of $316.4 million for the three months ended June, compared with $59 million a year earlier.

Wilmar posted a core net profit, which excludes non-operating items, of $351.8 million, compared with $36.1 million a year earlier.

The company’s oilseeds and grains business posted a pretax profit of $290.2 million versus $60.3 in the year-earlier period.

Losses in the sugar segment narrowed in the quarter, while its tropical oils reported a 165 percent increase in pretax profit.

“The trade tensions between the U.S. and China improved crush margins in the short term, thus benefitting our oilseeds crushing business,” Kuok Khoon Hong, Chairman and CEO, said in a statement.

“However, a prolonged dispute between the two countries will have a negative impact on crush margins due to lower plant utilisation,” he added.

Source: Reuters

https://www.thestar.com.my/business/bus ... oQBrBRo.99

not vested

Wilmar International (WIL SP)
2Q18: Strong Set Of Results

Wilmar reported its strongest 2Q performance since 2011 in 2Q18 with a core net profit of US$352m.

Results were above our expectations as the tropical oils and oilseeds & grains divisions’ margins were stronger than expected.

The better qoq and yoy PBT was supported by better crushing volumes and higher crushing margin.

We may adjust our earnings forecasts post-briefing to take into account contributions from Renuka Sugar after Wilmar increases its stake to 58.34%.

Maintain BUY with a lower target price of S$3.90.

Source: UOBKH

https://research.uobkayhian.com/content ... 1cd3d62d75

not vested

Wilmar: Success in Indonesia proves biodiesel will not affect vehicle engines

KUALA LUMPUR: There should be no concern that the use of biodiesel will affect vehicle engines as proven by the implementation of the biodiesel programme in Indonesia, said Wilmar International.

In allaying concerns by Malaysian hauliers and automotive manufacturers on the implementation of the biodiesel programme in Malaysia, Wilmar International’s country head in Indonesia, Darwin Indigo said they had been carrying out the biodiesel programme for four years without any adverse effects to vehicle engines.

During a recent briefing with Malaysia’s Primary Industries Ministry, Indigo shared Indonesia’s experience and said it was “really possible and good” for Malaysia to implement its B10 (blend of 10% palm methyl ester and 90% diesel) programme for the transport sector.

Indonesia, the biggest palm oil producer in the world, introduced its B10 biodiesel programme in 2014, followed by the B15 program in April 2015 and B20 program early 2016.

“In the beginning there was reluctance by vehicle manufacturers but the Government set the rules and by the second year everyone supported the programme,” he said.

He said most vehicle manufacturers in Indonesia currently still provide engine warranty for use of B20.

“If the plantation trucks in Indonesia can run on bad roads and terrains there, it would be no problem for vehicles running on biodiesel plying normal conditioned roads,” Indigo added in a statement by the ministry.

Another factor, he said, was that besides regulations, Indonesia also imposed penalty on petrol stations and diesel producers for non-compliance.

A penalty of 6000 rupiah per liter of diesel is imposed for non-compliance and with strict enforcement and monitoring, the programme has been a success,” he said.

Wilmar is one of the biggest biodiesel producers in the republic and works closely with the Indonesian government in its B20 programme.

Wilmar exports biodiesel products to United States, Europe, India and China.

Source: The Star

https://www.thestar.com.my/business/bus ... rdLobx6.99

not vested

Wilmar International

In the previous quarter, Wilmar International (Wilmar) posted a strong performance with earnings that exceeded DBS’ expectations.

Going forward, DBS forecasts that Wilmar’s core earnings will grow by six percent year-on-year to US$1.1 billion in 2018.

At its current price, DBS notes that the market has fully priced in concerns over earnings fluctuation in its ‘Tropical Oils’ as well as ‘Oil Seeds and Grains’ segments. These two segments were dragged down by lower commodity prices and supply chain congestion. However, DBS thinks that the market is underestimating the ROE improvement potential on a stronger margin outlook.

In the long term, Wilmar’s proposed proposed JV with Ruchi will help Wilmar to create a stronger presence in India. It is also looking to penetrate the Chinese market with well-established brands like Goodman Fielder.

Investors can also look out for the plausible IPO plan of Wilmar’s China operations. The IPO is slated to be file in 1H19, based on DBS’ estimates. A successful IPO listing for Wilmar’s China operations could have a positive impact on its share price.

BUY, TP $3.61; Current share price $3.13

Source: Shares Investment

not vested

Wilmar: 3Q18 results better than expected

Wilmar registered a 4.3% YoY fall in revenue to US$11.6b and a 10.7% rise in net profit to US$407.4m in 3Q18, bringing 9M18 net profit to US$927.1m or 82% of our full year estimate.

Results were better than expected. Core net profit increased by 35.1% to US$434.7m, driven by better results in the Tropical Oils and Oilseeds & Grains segments.

Tropical Oils benefitted from improved margins in the downstream businesses while strong soybean crushing margins and good performance from the Consumer Products business lifted the performance of Oilseeds & Grains.

Looking ahead, management expects most of its operations to continue to do well in the coming quarter, due to generally better processing margins.

Pending an analyst briefing, we maintain our BUY rating but put our fair value estimate of S$3.51 under review.

Source: OCBC

not vested

Wilmar: Whither soybean crush margins

Wilmar registered a 4.3% YoY fall in revenue to US$11.6b and a 10.7% rise in net profit to US$407.4m in 3Q18, bringing 9M18 net profit to US$927.1m or 82% of our full year estimate.

Results were better than expected. Core net profit increased by 35.1% YoY to US$434.7m in 3Q18, driven by better results in the Tropical Oils and Oilseeds & Grains segments.

Meanwhile, we estimate that the IPO of its China operations could be around 4Q19.

We update our USD/SGD assumptions and also lower our P/E slightly from 13x to 12.5x such that our FV estimate slips from S$3.51 to S$3.42.

With limited upside, we downgrade our rating to HOLD and a fair value estimate of S$3.42.

Source: OCBC

Wilmar in cashflow stress test 'danger zone', says Exotix's Tiruchelvam
https://www.theedgesingapore.com/wilmar ... iruchelvam

Upside From Potential China IPO Target Price (Return) SGD3.58(+13%)

Price: SGD(+18%) 3.18
Market Cap: USD14,728m
Avg Daily Turnover (SGD/USD) 15.8m/11.6m

Maintain BUY and SGD3.58 TP, 13% upside, with 3% FY19F yield.

Wilmar is our Top Pick for exposure to the plantation sector. Given an unexciting year ahead for CPO prices, we believe Wilmar will outperform the sector as its exposure to the downstream space could help to mitigate the lower earnings in the plantation segment.

In addition, the potential A-share listing of its China operations could unlock some latent value in the stock through special dividends and a share price rerating.

Source: RHB

https://research.rhbtradesmart.com/atta ... 0e1ecc.pdf

Wilmar posts 53% drop in 4Q earnings to $272 mil on lower margin, one-off impairment
https://www.theedgesingapore.com/wilmar ... impairment

Wilmar in US$275 mil takeover deal to fully acquire food company Goodman Fielder
https://www.theedgesingapore.com/wilmar ... an-fielder