Wilmar Profit More Than Doubles to Record on China

By Luzi Ann Javier

Nov. 12 (Bloomberg) -- Wilmar International Ltd., the world's biggest palm oil trader, said third-quarter profit more than doubled to a record as sales rose on demand from China.

Net income advanced to $482.6 million, or 7.37 cents a share, from $195.2 million, or 3.06 cents, a year earlier, the Singapore-based company said today in a statement to the stock exchange. Sales increased 67 percent to $8.35 billion.

Oilseed processors including Wilmar, which supplies about 45 percent of China's retail cooking oil, benefited as the world's biggest buyer increased soybean imports. Palm oil futures averaged about 8 percent higher in the quarter compared with a year earlier.

``Wilmar is on course to exceed our 2008 net profit forecast and the consensus forecast of $1.1 billion by at least 27 percent,'' said Nirgunan Tiruchelvam, an analyst with ABN Amro Asia Securities (Singapore) Pte. said in an email.

Wilmar gained 1.2 percent to S$2.62 on the local stock exchange at 12:29 p.m. local time. The shares dropped 50 percent in the third quarter as the global credit crunch stoked concerns that economic growth would slow, crimping commodity demand.

The company's ``integrated business model and solid financial position offer competitive advantages in current conditions,'' according to presentation slides supplied to the Singapore stock exchange today. The ``financial crisis offers attractive investment opportunities.''

Wilmar said it will benefit from the decline in crude palm oil prices as it reduces costs. Crude palm oil has dropped 66 percent from a record in March. The contract for January delivery fell 4.2 percent to 1,520 ringgit a ton at 12:30 p.m. in Malaysia.

Revenue from palm and laurics, which contributed 28 percent of the company's profit in the first half, rose 63 percent to $5.28 billion in the third quarter from a year ago, as volume gained 44 percent.

Oilseeds, Grains

Sales of oilseeds and grains, which accounted for 39 percent of profit in the first half, increased 27 percent to $2.26 billion from a year earlier, after volume grew 10 percent.

China's soybean imports rose 32 percent to 28.7 million tons in the first nine months of the year, the customs office said on Oct. 13. Overseas-owned crushers account for about half of China's crushing capacity, according to the National Development and Reform Commission.

Wilmar plans to pay a dividend of 2.8 Singapore cents a share for the period, the company said in the statement.

To contact the reporter for this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net