Stock Name: Wilmar
Company Name: WILMAR INTERNATIONAL LIMITED
Research House: UBS
UBS which has a Neutral rating and a S$5.70 target price on the company, says the “poor performance in Wilmar's Oilseeds & Grains division was once again (as in 3Q10) the primary reason for the earnings pressure, as we believe the company was short soybean oil in the rising price environment.”
Company Name: WILMAR INTERNATIONAL LIMITED
Research House: UBS
Wilmar International (F34.SG) is down 4.6% at $5.16, after its 4Q results come in below consensus, with net profit down 27.9% on year at US$318.6 million ($407 million), and would have been lower at US$131.1 million if it were not for biological assets revaluation gains.
UBS which has a Neutral rating and a S$5.70 target price on the company, says the “poor performance in Wilmar's Oilseeds & Grains division was once again (as in 3Q10) the primary reason for the earnings pressure, as we believe the company was short soybean oil in the rising price environment.”
It notes the division lost US$173 million, while the Palm & Laurics division recorded an 8% increase in pre-tax profit to US$159 million. “The China consumer business also came under pressure due to the government's price cap on cooking oil.”
It adds, profit margins will remain under pressure this year, “as the oils processing business is under pressure from raw material cost inflation of higher soybean and CPO prices.”
Orderbook tips $5.15 support.
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