Why Wilmar can shrug off lower plantation profits

Lower soybean prices a likely upside for the agri player.

As crude palm oil prices started their downtrend in the past week, agri players are expected to suffer from lower plantation profits. For Wilmar, however, this could be more than offset by two things.

According to RHB, Wilmar's better processing margins due to lower feedstock costs would give it a boost amidst lower plantation yields. More so, RHB cites moderating soybean prices as a possible upside for Wilmar.

"A declining trend in soybean prices is generally positive for Wilmar. With the current bumper crop in Brazil, we believe positive crushing margins can be achieved at Wilmar," said the brokerage research firm.

Meanwhile, RHB noted how well Wilmar's investments in joint ventures and associates performed in the past year, delivering a 35% year-on-year growth in contributions.

"The group expects to benefit from the lifting of restrictions on foreign investments in China’s oilseeds and grains processing businesses. Given that its adjusted net gearing ratio has come off to 0.35x, we believe the group could gear up to take on more M&As," explained RHB.

Also Read

Olam Agri will not extend Namoi Cotton takeover offer

China Shenshan Orchard names Ngo Yit Sung as independent director

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit