Wilmar International Limited (WIL)’s FY16 revenue was up 6.8% to US$41.4b on stronger sales volume, which was largely within expectations. Net profit was down 5.0% to US$972.2m while core net profit was also lower by 14% to US$976.6m, mainly due to the S$343.8m loss in Oilseeds & Grains segment in 2Q16. Nonetheless, net profit came in above Bloomberg’s consensus expectations (~US$813m).

A strong 4Q16 showing saw a 27% and 70% increase YoY for revenue and net profit, respectively, driven by better performance across all segments, contribution from associates as well as recognition of deferred tax assets of US$142.1m.

On a full year basis, Tropical Oils’ pre-tax profit rose 40% to US$689.2m, while Sugar’s pre-tax profit grew 49% to US$125.3m (after a US$33.5m impairment charge). Pending an analyst briefing later today, we are keeping our HOLD rating while our FV of S$3.18 is under review.

A final dividend of S$0.040/share was declared, bringing total FY16 DPS to S$0.065/share, vs. S$0.080/share in the preceding year.

Source: OCBC Research - 21 Feb 2017