Olam profit jumps on asset's revaluation
OLAM International said its third-quarter profit more than tripled, largely on a gain from the revaluation of its holding in a Malaysian maker of natural sweeteners.
Net profit was $396.1 million in the three months ended March 31, compared with $108.5 million a year earlier, Olam said yesterday in a statement. Operating profit after tax and minority interest fell 16 per cent to $102.2 million.
Profit was boosted by a $271 million gain from the revaluation of Olam's 18.5 per cent stake in PureCircle. PureCircle was re-classified as an available-for-sale asset after Olam chief executive Sunny Verghese resigned from PureCircle's board.
Olam has no plan to sell its stake, Mr Verghese said.
The results were "in line with estimates", analyst Tanuj Shori of Nomura Holdings in Hong Kong said in a note. "We continue to like its long-term structural story."
Breedens Investments, a unit of Temasek Holdings, is leading a $5.3 billion offer for Olam, one of the world's top three coffee and rice traders, as agricultural assets attract bidders seeking exposure to rising global food demand.
The acquisition would draw a line under 2012's short-seller attack on Olam by Muddy Waters, which questioned its finances and caused its stock to plummet.
Olam's shares have since recovered from a December 2012 low of $1.395, and were little changed at $2.23 yesterday.