Sugar operations in Australia still losing money, says Wilmar
The Singaporean food giant behind the Australian retail sugar brands CSR Sugar and Equal has released its results for the second quarter ended 30 June 2012.
Wilmar International one of Asia’s leading agribusiness groups, told the Singapore Exchange that its sugar sector recorded a 28.8 per cent increase in revenue to $US840.9 million for the quarter and a 27.2 per cent increase to $US1.3 billion for the first half. This was accredited to higher merchandising activities. However, due to the seasonality of the Sugar Milling business the loss before tax increased to $US60.3 million for the second quarter of 2012 and US$108.2 million for the first half of 2012.
CSR products are manufactured and marketed in Australia by Wilmer’s Sugar Australia division, and is the leading supplier of refined sugar products for the industrial and commercial market in Australia. Refineries are located in Melbourne, Victoria and Mackay, Queensland. These produce over 5.2 million tonnes of raw sugar annually.
The Sugar Milling business in Australia reported a 59.7 per cent increase in losses before tax to US$79.1 million for the second quarter of 2012 and 89.9% to US$137.1 million for 1H2012. Excluding non-operating items, loss before tax from operations increased by 4.4% to US$71.9 million for 2Q2012 (2Q2011 : US$68.9 million loss before tax) and 7.0% to US$131.8 million for 1H2012 (1H2011 : US$123.2 million loss before tax).
The increased loss was said to be due to wet weather across all cane regions in Australia which delayed the crushing season and resulted in lower sugar production. There is typically a Milling business loss for the first two quarters of every year due to plant maintenance.
General report information
In addition to its sugar milling and refining sector, Wilmar’s sugar division it the biggest sugar distributor in Australia. Wilmar also has business in palm oil, oil seeds, edible oils, specialty fats, biodiesel, fertilisers and grains processing and distribution of the majority of Australia’s sugar supply.
Wilmar also owns 10.1 per cent shares in Australia’s largest bread maker Goodman Fielder.
Wilmar posted a net profit of $117.1 million, a 70 per cent drop from last year’s second quarter figures. The poorer performance was largely due to losses at Oilseeds and Grains from a continued difficult operating environment in China and lower plantation profits reflecting lower prices, a drop in production yield and higher production cost.
– Revenue increased by 4.3% to US$11.0 billion for 2Q2012 and 6.9% to US$21.5 billion for 1H2012
– Palm and Laurics, Consumer Products and Sugar reported revenue growth, attributed primarily to volume increase
– Oilseeds and Grains also recorded increased revenue for the quarter led by higher selling price