Wilmar International Limited (WIL) reported its 3Q16 results yesterday evening. Revenue was up 4.1% YoY to US$1.1b on higher commodity prices. Net profit rose 47% to US$392.2m while core net profit was also higher by 10% to US$394.9m, driven by both Tropical Oils segment and Oilseeds segment.

On Tropical Oils segment, although Plantation results were affected by lower production volume, pre-tax profit rose 81% on better crude palm oil prices during the quarter. Oilseeds segment’s pre-tax profit was up 1.9% and showed recovery from 2Q16. However, Sugar business pre-tax profit was weaker by 21% due to its merchandising business as well as disruption to cane harvesting activities due to wet weather in Australia.

For 9M16, revenue was marginally up 0.7% to US$2.9b, while net profit declined 40.6% to US$411.5m. Pending more information at an analyst briefing later, maintain HOLD while our S$3.00 fair value is under review.

Source: OCBC Research - 11 Nov 2016