Olam Group’s annual results impacted by headwinds, yet ofi division shows growth
The Olam Group has released its full year results that have yielded a mixed picture, with revenues up 16% to $56.1 billion, while net profits fell 52% to $216 million, amid global market headwinds, writes Neill Barston.
Notably, as reported this past week, the business put forward the sale of the remaining stake in its Agri division, valued at a total of $4bn, which had recorded an upturn in performance during the past year, and this is anticipated to bolster its overall financial position.
Significantly, the company’s ingredients division, ofi, which devises applications for a broad base of categories including confectionery, snacks and bakery markets, experienced Double-digit EBIT growth of 29.1%. It noted that ingredients and solutions reported an increase of 41.8%.
However, the business noted that market volatility remained a factor in its trading, but diversification and scaling moves had been to its benefit.
Olam Group Co-Founder and CEO, Sunny Verghese, said: “We delivered EBIT growth in 2024 even as we navigated elevated prices of some commodities due to supply challenges, volatile macroeconomic and market conditions, and sustained high interest rates. Our collective resilience and ability to react to market changes is testament to ofi and Olam Agri’s differentiated business models.
“We are also pleased to reach a major milestone in our Re-organisation Plan as we announced the sale of our remaining stake in Olam Agri to SALIC. This landmark deal will allow us to unlock significant value for our shareholders, right-size Olam Group’s capital structure and position Olam Agri for further profitable growth and value creation. “We will now focus on supporting ofi in its drive towards growing its higher-margin and higher value-added ingredients and solutions business even as we seek strategic options to unlock value for the Remaining Olam Group businesses and ofi, including the pursuit of an ofi IPO.”
Olam Group CFO, N Muthukumar, said: “Our capital expenditure remained steady throughout 2024 and we have been disciplined in prioritising the use of our working capital towards businesses that can generate better returns in this environment where interest rates had remained elevated. We will continue to stay prudent and be highly selective in our investment choices, while pruning less profitable businesses.”
