Wilmar registered a 4.3% YoY fall in revenue to US$11.6b and a 10.7% rise in net profit to US$407.4m in 3Q18, bringing 9M18 net profit to US$927.1m or 82% of our full year estimate. Results were better than expected.

Core net profit increased by 35.1% to US$434.7m, driven by better results in the Tropical Oils and Oilseeds & Grains segments. Tropical Oils benefitted from improved margins in the downstream businesses while strong soybean crushing margins and good performance from the Consumer Products business lifted the performance of Oilseeds & Grains.

Looking ahead, management expects most of its operations to continue to do well in the coming quarter, due to generally better processing margins. Pending an analyst briefing, we maintain our BUY rating but put our fair value estimate of S$3.51 under review.

Source: OCBC Research - 13 Nov 2018