Olam International (VC2) H1 2025 earnings summary

Executive summary

• Net profit for H1 2025 surged to S$345.98 million, up 574% year-over-year, driven by strong EBIT growth in ofi and improved performance in both continuing and discontinuing operations, with Olam Agri showing marginal growth.

• The conditional sale of Olam Agri to SALIC marks a major milestone in the re-organisation plan, unlocking significant value for shareholders, with Olam Agri now classified as discontinued operations held for sale.

• Interim dividend declared at 2.0 cents per share, down from 3.0 cents last year.

• Group results are presented as OFI plus Remaining Olam Group, with Olam Agri's performance included as a single line item in the P&L.

• Adjusted results provide a pro forma view including all three operating groups for like-to-like comparison.

Financial highlights

• Adjusted group revenue (including Olam Agri) was S$33.3 billion, up 23.8% year-over-year, with volume up 14.5% to 27.8M MT.

• Adjusted EBIT increased 35.5% to S$1,203.1 million; EBITDA up 25.6% to S$1,580.6 million.

• Operational PATMI reached S$327.1 million, up 345% year-over-year, with net profit for the period at S$345.98 million.

• Free cash flow improved by S$4.4 billion, from -S$5.5 billion to just under -S$1 billion.

• Net gearing (reported) reduced from 2.60x to 2.09x; adjusted net gearing (including Olam Agri) at 2.83x.

Outlook and guidance

• The business outlook for the next six months remains uncertain due to geopolitical conflicts, US tariffs, inflation, and volatile macroeconomic conditions.

• ofi expects near-term volatility in cocoa and coffee but maintains guidance for low- to mid-single digit volume growth and high single-digit adjusted EBIT growth over the medium term.

• Remaining Olam Group to focus on responsible divestment and expects operational performance to normalise in H2 2025.

• Management is cautious but confident in navigating volatility, with no artificial deadlines for asset sales or OFI listing.

• Olam Agri (Discontinuing Operations) anticipates a steady year despite external headwinds.