Olam Group H1 profit jumps on disposal gains; shares fall
First-half net profit rose sharply on asset sales, but shares declined as investors weighed weaker underlying performance. Singapore-listed agribusiness reports earnings.
Olam Group Ltd. reported a surge in first-half net profit, driven by gains from asset disposals, though its shares slipped as investors focused on softer underlying earnings.
The Singapore-based agribusiness giant said net profit for the six months ended June 30 rose to $345 million from $156 million a year earlier. The increase was primarily attributed to gains from the disposal of non-core businesses, including the sale of its cocoa business to Cargill in 2023 and other strategic divestments.
Underlying earnings before interest, taxes, depreciation and amortization (EBITDA) fell 5% year-over-year to $1.1 billion, reflecting weaker margins in its core food and agri-commodities segments. Revenue declined 3% to $13.2 billion, as lower commodity prices and reduced trading volumes weighed on performance.
Olam’s shares fell 2.1% in Singapore trading on Wednesday, underperforming the broader market. The decline followed the earnings release, as investors digested the mixed results. Analysts noted that while disposal gains boosted profitability, the drop in underlying EBITDA signaled potential challenges in the company’s operational performance.
The company maintained its full-year guidance, reaffirming its target for underlying EBITDA of $2.1 billion to $2.3 billion. Olam also highlighted progress in its debt reduction strategy, with net debt declining to $4.2 billion at the end of June, down from $4.5 billion at the end of 2023.
Chief Executive Officer Sunny Verghese said the disposal program had strengthened the company’s balance sheet and positioned it for long-term growth. "We remain focused on optimizing our portfolio and driving operational efficiency," Verghese stated.
The earnings report comes amid broader concerns about global commodity markets, including soft demand in key regions and volatility in agricultural prices. Olam’s performance reflects broader trends in the agribusiness sector, where companies are navigating a challenging macroeconomic environment.
Priya covers listed equities and corporate earnings, reading quarterly results and guidance for what they signal about sector health and forward valuations.
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