Olam shares fall 11% amid steep profit drop

SHARES of Olam Group dived about 11 per cent just after the market open on Friday (Feb 28), as it posted an 83.4 per cent fall in net profit.

At around 9.12 am, Olam shares recovered slightly to S$0.96, a nearly 8 per cent decline.

Before the market open, the agribusiness giant reported a net profit of S$38.4 million for the second half ended Dec 31, down 83.4 per cent from S$230.8 million in the previous corresponding period.

The group noted that its net profit declined as earnings before interest and tax growth was offset by “a significant increase in net finance costs and higher net exceptional losses”.

These losses were mainly from the temporary cessation of operations at its food ingredients unit ofi’s onion and parsley processing plant, as well as the lease surrender and exit of two non-strategic almond orchards in the US.

Excluding these exceptional items, underlying profit fell 47.9 per cent on the year to S$142.8 million.