Profit for Olam Group in H1 Inches Higher; Further Restructuring Ahead

Olam Group Ltd (SGX:OLAG), a Singapore-based commodity trader, announced a slightly greater profit for the first half of 2022 and disclosed that it was evaluating "strategic alternatives" for two further companies.

Friday, the world's largest coffee distributor said that its net profit attributable to shareholders for the six months ending June 30 rose 1.8% to S$429.1 million ($313.2 million). The revenue increase to S$28.45 billion is attributable to the rise in commodity prices.

Despite volatile commodity markets caused by the Russia-Ukraine crisis and COVID lockdowns in China, Olam's agro products division, which deals in food and industrial items, remained the company's top revenue source.

Due to global market volatility, Olam's expenses rose by around 25%.

The firm claimed that it remained committed to spinning off its food ingredients business, OFI, via a London initial public offering, but was waiting for market conditions to improve. The business did not disclose a particular date for its 2021 initial public offering.

OFI, which deals in coffee, chocolate, and edible nuts, accounted for around fifty percent of Olam's first-half revenue. Initially, the group expected to issue the IPO in the June quarter, however owing to unfavorable market conditions, the IPO has been postponed indefinitely.

The business characterized its view for the remainder of 2022 as "cautiously optimistic" and expects Olam Agri to have a better performance than in 2021.

Olam indicated that it will consider "strategic options" for its venture capital and technology and business services businesses as part of a five-year plan to reduce its focus and increase earnings.

In accordance with the plan, the company claimed continuing progress in selling off less important assets and monetizing "gestating" assets.

Olam anticipates incurring further one-time expenditures linked to the reorganization in the second half of 2022, but at a lesser rate than in 2021.