Wilmar’s first half net profits surge 49% on Chinese demand boost

Singapore-based trading house Wilmar has reported a 49% surge in its net profits for the six-month period to June as a solid recovery in China’s economy following the Covid-19 outbreak drove firmer demand. 

The group’s core net profits jumped to $610.9 million for the period, with top line revenue for the group 12% higher on the year at $22.66 billion on “improved demand across all core segments.” 

“As a result of the Covid-19 pandemic, consumer products sales increased significantly because people ate more often at home and also bought higher quality products,” the company said in a statement.

Wilmar’s CEO and chairman, Kuok Khoon Hong, said the company’s operations have not been “significantly impacted” by the pandemic as the business is mainly focussed on production and distribution of essential food products.

“Further, China, the country where the group has the largest operations, has recovered from this pandemic earlier than most countries,” Hong said, adding that he expects Wilmar “to continue to perform well for the rest of the year”.

Over half of the group’s net profits during the period were generated by its Feed and Industrial Products segment – including its oilseed and palm oil trading operations – which reported a 105% surge in net profits.

Net profits for the segment jumped “on the back of a strong recovery in oilseeds and grains, as demand in China recovered from the African swine fever outbreak that occurred in the previous year,” the company said.

“This resulted in strong crush margins and volume during the period.”

The recent surge in palm oil prices also supported its earnings with palm oil production levels mostly flat on the year at 1.9 million mt.

Finally, Wilmar continued to make progress towards the public listing of its Chinese subsidiary, Yihai Kerry Arawana Holdings Co., Ltd on the Shenzhen Stock Exchange (“SZSE”) for which it recently received listing clearance.

It now awaits final registration approval from the China Securities Regulatory Commission, after which it will be able to publish a date for the planned IPO.