Olam posted a slightly weak start to the “new year” (note that the company has changed its year-end from Jun to Dec). 1Q15 revenue slipped 11% YoY (-11% QoQ) to S$4321.1m, on the back of lower sales volume (down 33.2% YoY) as it continues to restructure lower margin businesses as part of its strategic plan objectives.

Reported net profit tumbled 92% YoY (-74% QoQ) to S$31.3m; mainly due in part to an exceptional gain of S$294m in 1Q14 as well as an exceptional loss of S$97m in 1Q15. Excluding these items, Olam said operational NPAT was actually up 26% YoY (+22% QoQ) at S$128.5m.

However, we are still in the midst of reworking our full-year estimates to account for the change in year-end and seasonality. While we are maintaining our HOLD rating, we will be revising our fair value estimate after the analyst briefing.

Source: OCBC Research - 15 May 2015