Wilmar registered a 3.0% YoY fall in revenue to US$11.1b but saw a 52.9% fall in net profit to US$200.9m in 4Q18, bringing full year net profit to US$1.13b vs FY17’s net profit of US$1.2b. Results were impacted by a US$137.8m provision for impairment on the goodwill and sugar milling assets in Australia, due to continued depressed sugar prices.

For 4Q18, core net profit decreased by 10.3% to US$334.7m mainly due to the African swine fever outbreak in China, coupled with weaker commodity prices that impacted the upstream operation in Sugar Milling and Palm Plantation. Excluding one-offs, results were generally within expectations.

A final dividend of S$0.07/share has been declared, bringing the full year dividend to S$0.105, compared to S$0.10 last year. FY18 dividend is higher due to a higher interim dividend announced earlier.

Pending an analyst briefing, we maintain our HOLD rating but put our fair value estimate of S$3.42 under review.

Source: OCBC Research - 22 Feb 2019