Olam posted a slightly weaker-than-expected 2QFY15 results this morning. Although revenue grew 8.3% YoY to S$4879.4m, EBITDA slipped 11.3% to S$278.3m, affected mostly by adverse currency devaluations, lower trading volumes and underperformance in hazelnuts and Dairy farming in Uruguay. Reported net profit slipped 12.0% to S$118.7m; operational NPAT fell by a larger 18.5% to S$105.1m.

For 1HFY15, revenue was up 4.0% at S$9178.0m, meeting 44% of our full-year forecast, while reported NPAT slipped 9.7% to S$163.0m; operational NPAT tumbled 21.4% to S$137.3m, or 31% of our FY15 estimate. We note that this is also at the lower end of its 30-40% earnings guidance for seasonality. We will have more after the analyst update. In the meantime, we place our Hold rating and S$2.30 fair value under review.

Source: OCBC Research - 13 Feb 2015