For those of you who are interested in investing in the agri-commodity sector (where companies are in the businesses of crude palm oil cultivation and production, rubber plantation and processing, as well as producing food ingredients such as cocoa, coffee, edible nuts and grains, etc.), there are 10 companies listed on the Singapore Exchange you may have a look at.

Photo by Wayne Robinson on Unsplash

In this post, you will find a list of these 10 companies, a brief introduction of their businesses, as well as a review of its latest results for the 1st half of the financial year 2024 ended 30 June (i.e., 1H FY2024).

Let’s begin:

1. Wilmar International Limited (SGX: F34)

Founded in 1991 and headquartered in Singapore, Wilmar International is Asia’s leading agribusiness group. It is in the business of oil palm cultivation, oilseed crushing, edible oils refining, flour and rice milling, sugar milling and refining, manufacturing of consumer products, ready-to eat meals, central kitchen products, specialty fats, oleochemicals, biodiesel and fertilisers as well as food park operations.

Currently, the company has over 1,000 manufacturing plants and an extensive distribution network covering China, India, Indonesia, as well as 50 other countries and regions.

Wilmar International is the only company out of the 10 agri-commodity companies we are looking at that is part of the benchmark Straits Times Index currently.

	1H FY2023	1H FY2024	% Variance
Revenue (US$’mil)	US$32,538 mil	US$30,935 mil	-4.9%
Net Profit (US$’mil)	US$551 mil	US$580 mil	+5.3%
Gross Profit Margin (%)	7.5%	8.1%	+0.6%-pt
Net Profit Margin (%)	1.7%	1.9%	+0.2%-pt
Dividends Per Share (S$)	S$0.06	S$0.06	–

It was a mixed set of results for 1H FY2024 for Wilmar International – with revenue down by close to 5% to about US$31 billion, but net profit was up by slightly more than 5% to US$580 million.

The decline in revenue can be attributed to a decrease in prices of commodities, but this was partially offset by higher volume of sales.

Due to a higher percentage decline in the cost of sales (by 5.6%) compared to its revenue (which fell by 4.9%), its gross profit margin improved by 0.6 percentage points (pp) to 8.1%.

The improvement in its net profit was driven by better performances in the Feed & Industrial Products (which was up by 34%, mainly driven by an increase in sales volume and improvements in crushing margins in the 2nd quarter of FY2024) and Food Products (which jumped by 77% due to stronger sales volume and a decline in commodity prices which led to lower rate material costs) segments, but partially offset by lower contributions from its joint ventures and associates, as well as sugar milling operations.

2. First Resources Limited (SGX: EB5)

Established in 1992, and listed on the Singapore Exchange in 2007, First Resources is one of the leading palm oil producers in the region, managing over 200,000 hectares of oil palm plantations across the Riau, Kalimantan, and West Kalimantan provinces of Indonesia.

Key business activities include the cultivating of palm oils, harvesting of fresh fruit bunches and milling them into crude palm oil and palm kernel. Additionally, the company also processes these crude palm oil and palm kernel into higher value palm-based products including biodiesel, refined, bleached and deodorised olein as well as sterin, palm kernel oil, and palm kernel expeller.

	1H FY2023	1H FY2024	% Variance
Revenue (US$’mil)	US$448.8 mil	US$457.2 mil	+1.9%
Net Profit (US$’mil)	US$71.5 mil	US$103.9 mil	+45.4%
Gross Profit Margin (%)	35.0%	40.9%	+5.9%-pt
Net Profit Margin (%)	16.0%	22.8%	+6.8%-pt
Dividends Per Share (S$)	S$0.025	S$0.035	+40.0%

Revenue saw a 2% improvement to US$457 million, primarily due to higher production volumes as compared to the same period last year, partially offset by a reduction in purchases of palm oil products from third parties for processing and sale.

Net profit soared by 45% to US$104 million from higher production volumes and improved processing margins. However, if effect of gains arising from changes in fair value of biological assets are excluded, its net profit would have been up by about 34% to US$91 million.

An increase in revenue (by about 2%), coupled with a drop in cost of sales (by about 7% mainly due to lower purchases of palm oil products from third parties) saw the company’s gross profit margin recording a 5.9pp improvement to 40.9%.

3. Golden-Agri Resources Limited (SGX: E5H)

Founded in 1996, and listed on the Singapore Exchange in 1999, Golden-Agri Resources Limited is a leading fully-integrated agribusiness company, where it has a diversified customer base in over 100 countries through its global distribution network with shipping and logistics capabilities, destination marketing, onshore refining and ex-tank operations.

The company’s primary activities include cultivating and harvesting oil palm trees, processing of fresh fruit bunch into crude palm oil and palm kernel, refining crude palm oil into value-added products such as cooking oil, margarine, shortening, biodiesel and oleo-chemicals, as well as merchandising palm product globally.

	1H FY2023	1H FY2024	% Variance
Revenue (US$’mil)	US$4,876 mil	US$5,142 mil	+5.4%
Net Profit (US$’mil)	US$182 mil	US$102 mil	-43.8%
Gross Profit Margin (%)	18.1%	17.9%	-0.2%-pt
Net Profit Margin (%)	3.7%	2.0%	-1.7%-pt

It was a mixed set of results for Golden-Agri Resources, with its revenue up by about 5% to US$5.1 billion (which can be attributed to higher merchandising sales volume), while its net profit slumped by 44% to US$102 million (mainly due to unrealised foreign exchange losses, higher financial expenses, and higher income tax expenses).

Due to the slightly higher percentage increase in the cost of sales (by 5.7%) compared to its revenue (by 5.4%), the agribusiness company’s gross profit margin dipped by 0.2pp to 17.9%.

The company distributes dividends annually, when it announces its full-year results, so no dividends were declared this time round.

4. Bumitama Agri Limited (SGX: P8Z)

Bumitama Agri is one of the leading producers of crude palm oil and palm kernel in Indonesia. Its core business encompasses the cultivation of oil palm, harvesting of fresh palm fruit bunches, and processing of fresh palm fruit bunches into crude palm oil and palm kernel.

The company was founded in 1996 and listed on the Singapore Exchange in 2012.

	1H FY2023	1H FY2024	% Variance
Revenue (IDR’bil)	IDR7,496 bil	IDR7,600 bil	+1.4%
Net Profit (IDR’bil)	IDR1,189 bil	IDR857 bil	-27.9%
Gross Profit Margin (%)	28.7%	23.7%	-5.0%-pt
Net Profit Margin (%)	15.9%	11.3%	-4.6%-pt
Dividends Per Share (S$)	S$0.0125	S$0.0120	-4.0%

Bumitama Agri’s financial results for 1H FY2024 (compared against its results a year ago) was a mixed one – with revenue inching up by 1.4% to IDR7,600 billion (which can be attributed to a 15% spike in sales contribution from palm kernel, where both volume and price climbed), but net profit tumbled by close to 28% to IDR857 billion.

Cost of sales climbed by 8.6% to IDR5,342 billion, mainly due an increase in the cost of inventories, as well as the depreciation of mature bearer plants, property, plant, and equipment, as well as the amortisation of land use rights. This led to the company’s gross profit margin recording a 5.0pp decline in its gross profit margin to 23.7%.

5. Indofood Agri Resources Limited (SGX: 5JS)

Indofood Agri Resources Limited, or IndoAgri for short, is one of the largest palm oil producers in Indonesia.

Its business activity spans the entire supply chain from research and development, seed breeding, oil palm cultivation and milling, as well as the producing and marketing of cooking oil, shortening and margarine.

Additionally, the company also engages in the cultivation of sugar cane, rubber, and other crops.

	1H FY2023	1H FY2024	% Variance
Revenue (IDR’bil)	IDR7,608 bil	IDR7,053 bil	-7.3%
Net Profit (IDR’bil)	IDR89 bil	IDR298 bil	+236.0%
Gross Profit Margin (%)	16.2%	22.2%	+6.0%-pt
Net Profit Margin (%)	1.2%	4.2%	+3.0%-pt

Revenue fell by 7% to IDR7,053 billion mainly due to lower sales volume of crude palm oil and palm kernel-related products, and lower selling prices of Edible Oils and Fats products (which includes edible oil, margarine, shortening, and other related products and its derivative products).

However, net profit surged by 236% to IDR298 billion mainly due to higher profit from operations (mainly due to higher gross profit, higher foreign exchange gain, and gain arising from changes in fair value of biological assets), and lower net financial expenses.

Gross profit margin improved by 6.0pp to 22.2% contributed by a higher percentage decline in cost of sales (by 14.0%) mainly due to lower sales volume of palm products and lower purchase costs of raw materials by Edible Oils and Fats Division.

No dividends has been declared by the company for the period under review.

6. Mewah International Inc (SGX: MV4)

In operation since the 1950s, Mewah International has grown to become one of the most prominent edible oils and fats businesses, with its products marketed to more than 100 countries through a well-established global sales and distribution networks, duly supported by its wide range of brands including long-established and well-recognised OKI and MOI.

The company’s business comprises of 2 business segments – the Bulk segment (which produces and sells vegetable-based edible oil and fat products in bulk form primarily to distributors and factories involved in the production of confectionery, bakery products, and other food items) and Consumer Pack segment (which produces vegetable-based edible oil and fat products under the group’s own brands and under the brands of third parties, primarily to distributors and factors involved in the production of confectionary, bakery products, and other food items).

	1H FY2023	1H FY2024	% Variance
Revenue (US$’mil)	US$2,136 mil	US$1,910 mil	-10.6%
Net Profit (US$’mil)	US$10 mil	US$19 mil	+82.7%
Gross Profit Margin (%)	6.0%	7.3%	+1.3%-pt
Net Profit Margin (%)	0.5%	1.0%	+0.5%-pt
Dividends Per Share (S$)	S$0.014	S$0.014	–

Mewah International’s revenue declined by 10.6% to US$1,910 million as a result of lower prevailing selling prices.

Net profit margin, however, skyrocketed by 83% to US$19 million, which can be attributed to improved margins for both its Bulk and Consumer Pack business segments.

As a result of a higher percentage fall in terms of its cost of sales (by 11.8%) compared to its revenue (which declined by 10.6%), its gross profit margin saw a 1.3pp improvement to 7.3%

7. Kencana Agri Limited (SGX: BNE)

Dual listed on the Frankfurt Stock Exchange (under the ticker symbol FRA: KEBA), as well as on the Singapore Stock Exchange (under the ticker symbol SGX: BNE), Kencana Agri Limited is a plantation company engaged mainly in the cultivation of oil palms, processing of fresh fruit bunches into crude palm oil, crude palm kernel oil, palm kernel cake, and palm kernel, as well as providing bulking services.

The company’s plantations are located mainly in Sumatra, Kalimantan, and Sulawesi regions of Indonesia.

	1H FY2023	1H FY2024	% Variance
Revenue (US$’mil)	US$61.8 mil	US$54.5 mil	-11.7%
Net Profit (US$’mil)	US$1.9 mil	US$0.6 mil	+69.6%
Gross Profit Margin (%)	16.0%	26.2%	+10.2%-pt
Net Profit Margin (%)	3.1%	1.1%	-2.0%-pt

Kencana Agri’s financial results for 1H FY2024 compared against the same time period last year was a weaker one – with its revenue and net profit tumbling by double-digit percentages.

The 12% decline in its revenue to US$54.5 million was due to lower selling prices of crude palm oil and palm kernel. However, this was partially offset by an increase in sales volume of palm kernel.

Net profit slumped by 70% to US$0.6 million as a result of impact of foreign exchange loss of US$2.1 million (compared to a gain of US$4.5 million last year).

The only positive was the 10.2pp climb in its gross profit margin – as cost of sales fell by a bigger percentage (of 22%) mainly due to more moderate upkeep, manuring and maintenance activities compared to last year.

No dividends were declared by the company for the period under review.

8. Sri Trang Agro-Industry Public Company Limited (SGX: NC2)

Established in 1987, Sri-Trang Agro-Industry Public Company Limited is a fully integrated natural rubber company which is dual listed in the Stock Exchange of Thailand (under the ticker symbol BK: STA), as well as on the Singapore Exchange (under the ticker symbol SGX: NC2).

Particularly, for the upstream business, it has an area of 7,500 hectares for rubber and other economic crop plantations in 19 provinces in Thailand; for the midstream business, the company offers a complete range of natural rubber products to meet the diverse needs of customers worldwide; for the downstream business, the company produces and distributes latex and nitrile examination and industrial gloves to customers in over 175 countries globally.

	1H FY2023	1H FY2024	% Variance
Revenue (THB’mil)	THB45,653 mil	THB49,498 mil	+8.4%
Net Profit (THB’mil)	THB398 mil	THB299 mil	-24.9%
Gross Profit Margin (%)	10.3%	10.1%	-0.2%-pt
Net Profit Margin (%)	0.9%	0.6%	-0.3%-pt

For the 1st half of FY2024 (compared against last year), it was largely a negative set of results – the only positive was the 8.4% growth in its revenue to about THB50 billion.

Net profit fell by 25% to about THB300 million, mainly attributed to the company falling into a net loss position in the 1st quarter.

Gross profit margin inched down by 0.2pp to 10.1% as a result of a higher percentage increase in its cost of sales and services (by 8.6%) compared to the increase in its revenue (by 8.4%).

No dividends were declared by the company for the 1st half of the financial year, as it pays out a dividend on an annual basis (and declared when it releases its results for the full-year).

9. Olam Group Limited (SGX: VC2)

Olam Group is a leading food and agri-business supplying food, ingredients, feed, and fibre including cocoa, coffee, wheat, rice, cotton, and wood to 22,000 customers around the world, and its value chain spanning over 60 countries which includes farming, origination, processing, and distribution operations.

	1H FY2023	1H FY2024	% Variance
Revenue (S$’mil)	S$24,685 mil	S$26,921 mil	+9.1%
Net Profit (S$’mil)	S$48 mil	S$48 mil	–
Net Profit Margin (%)	0.2%	0.2%	–
Dividends Per Share (S$)	S$0.03	S$0.03	–

Apart from the 9.1% climb in its revenue to about S$27 billion on higher sales volume, all else remains pretty much unchanged compared to last year.

10. Delfi Limited (SGX: P34)

Formerly known as Petra Foods Limited, before being renamed as Delfi Limited in May 2016, the company is in the business of manufacturing as well as distributing branded consumer products (including an established portfolio of chocolate confectionery brands such as Silverqueen, Ceres and Delfi) sold in 17 markers including Indonesia, Singapore, Malaysia, Hong Kong, Australia, Thailand, the Philippines, and China.

	1H FY2023	1H FY2024	% Variance
Revenue (US$’mil)	US$283.0 mil	US$260.8 mil	-7.8%
Net Profit (US$’mil)	US$25.2 mil	US$19.6 mil	-22.3%
Gross Profit Margin (%)	29.2%	28.8%	-0.4%-pt
Net Profit Margin (%)	8.9%	7.5%	-1.4%-pt
Dividends Per Share (S$)	S$0.0273	S$0.0272	-0.4%

Overall, it has been a weaker set of results for Delfi Ltd.

Revenue for 1H FY2024 fell by close to 8% to about US$261 million – particularly, its business in Indonesia fell by 10.7% due to a 12.1% decline in Own Brands and a 7.1% decline in Agency Brands (as a result of the termination of an Agency Brand); its business in regional markets dipped by 1.9% due to lower demand for Own Brands, and partially offset by Agency Brands growth particularly in the Philippines and Malaysia.

The 0.4pp dip in its gross profit margin to 28.8% can be attributed to the weakness in regional currencies (with the Indonesia Rupiah weakening by 4.9% against the US dollar), and this impacted the company’s raw material purchases.

Closing Thoughts

As you can see from the latest 1H FY2024 results reported by the 10 agri-commodity companies, most of them have a mixed performance. First Resources manage is the only one to record a year-on-year improvement in its revenue and net profit, while Olam Group Limited have a set of financial figures that is more or less the same as last year.

In terms of dividend payouts, most of them have a half-yearly payout frequency, except for Golden-Agri Resources Limited, Indofood Agri Resources Limited, Kencana Agri Limited, as well as Sri Trang Agro-Industry Public Company Limited.

Another thing to note if you like to invest in any of the companies is that, the agri-commodities industry is a cyclical one, and their financial performances can greatly be impacted by demand-supply, as well as by extreme weather conditions.

With that, I have come to the end of my post where I have looked at each of the 10 companies in the agri-commodities industry listed on the Singapore Exchange. I hope this article have given you a better understanding about them.

Finally, do note that the contents in this post does not represent any buy or sell calls for any of the 10 companies. You are strongly advised to do your own due diligence before making any investment decisions.

Disclaimer: At the time of writing, I do not have shares of any of the companies in this post.

The post Harvesting Profits? A Look at the Latest Financial Performance of Singapore's 10 Agri-Commodity Stocks first appeared on The Singaporean Investor.