(Reuters) -Singapore’s Olam Group reported a slump in its full-year underlying profit on Friday, impacted by an increase in net finance costs coupled with a sharp rise in prices of commodities such as cocoa and coffee.
Olam, one of the world’s biggest agricultural commodities traders, reported operational profit after tax and minority interests of S$216.3 million ($160.5 million) for the year ended December 31, compared to S$458.1 million the previous year.
The company recorded net finance costs of S$1.58 billion as compared to S$1.13 billion a year ago.
Olam’s Incubating Businesses and Olam Global Holdco units also recorded a 14.7% drop in full-year revenue.
However, Olam Agri, the company’s top revenue-generating segment, reported a rise of 5.9% in its full-year sales revenue to S$33.17 billion.
The company declared a final dividend of 3 Singapore cents per share, compared with 4 Singapore cents declared last year.
Earlier in the week, Olam agreed to sell its 44.58% stake in its agricultural business Olam Agri to Saudi Arabia’s agricultural and livestock investment firm SALIC for $1.78 billion.
The transaction valued Olam Agri at $4 billion, higher than the $3.5 billion valuation in December 2022 when it sold a 35% stake to SALIC, and now gave SALIC an 80% controlling stake in the business.
“The group will focus on seeking strategic options to unlock value for the remaining Olam Group businesses and Olam Food Ingredients (ofi), including the pursuit of an ofi IPO,” the company said.
($1 = 1.3477 Singapore dollars)
(Reporting by Roshan Thomas and Nichiket Sunil in Bengaluru; Editing by Mohammed Safi Shamsi and Varun H K)
