Wednesday, February 23, 2011

Bank of America Merrill Lynch cuts Wilmar to underperform

Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED
Research House: BofA Merrill Lynch

Bank of America Merrill Lynch has downgraded the world’s largest listed palm oil firm Wilmar International (WLIL.SI) to underperform from neutral and put its target price of $5.85 under review.

Wilmar’s fourth quarter earnings fell by 28% due to pre-tax losses in its oilseeds and grains business as a result of poor crushing margins and its less timely purchases of raw materials.

“The volatile soft commodity markets coupled by the counter inflation pressure in China are likely to add on pressure in the short-term earnings prospect,” Merrill said in a report.
Recent floods in Australia is also likely to have affected sugar sales of Wilmar’s unit Sucrogen as well, the brokerage added.
Shares of Wilmar were 4.4% lower at $5.17 at 3:30a.m. They have lost about 8% since the start of the year.

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