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Consumer Non-Durables

Olam International Ltd.

Company Background

Olam was established in 1989 in Nigeria by Indian conglomerate Kewalram Chanrai Group. It eventually incorporated in Singapore as Olam International in 1995. The company started as an exporting company for agricultural products such as raw cashew nuts from Nigeria to India. Olam has since expanded its trading business to 65 countries with products now including grains, sugar and palm oil as well as materials for industry such as rubber, fertilizer and wood products. It is now one of the world's largest suppliers of cocoa and coffee. Following its initial public offering in 2005, Olam's growth strategy shifted to include mergers and acquisitions. The company has acquired stakes in various food and industrial material-related companies, including a 20% stake in Malaysian PureCircle, a producer of food sweeteners.

In 2012, Olam's stock price was hit by allegations from U.S.-based Muddy Waters over its acquisition and accounting practices, accusations denied by Olam. Recently, the company has taken initiatives to optimize its balance sheets by reducing stakes in noncore businesses. Investor sentiments were boosted when a consortium led by Temasek Holdings, Singapore's sovereign wealth fund, bought a majority stake in the company. Sunny George Verghese is the current group managing director and CEO of Olam. Verghese has led Olam since he built the business for Kewalram Chanrai Group while in Nigeria. Prior to joining the company, he worked for Unilever in India.

Business Summary

Olam International Ltd. engages in sourcing, processing, packaging, and merchandising of agricultural products. It operates through the following segments: Edible Nuts & Spices; Confectionery & Beverage Ingredients; Industrial Raw Materials, Infrastructure & Logistics; Food Staples & Packaged Foods; and Commodity Financial Services. The Edible Nuts & Spices segment produces Edible Nuts (cashew, peanuts, almonds, hazelnuts, pistachios, walnuts, sesame and beans including pulses, lentils and peas), spices and vegetable ingredients (including pepper, onion, garlic, capsicums and tomato). The Confectionery & Beverage Ingredients segment includes cocoa and coffee. The Industrial Raw Materials, Infrastructure & Logistics segment manufactures cotton, wood products, rubber, fertilizer and it also includes Gabon Special Economic Zone, including ports and infrastructure. The Food Staples & Packaged Foods segment comprises of rice, sugar and sweeteners, grains and animal feed, edible oils, dairy, and packaged foods. The Commodity Financial Services segment provides risk management solutions, market-making, volatility and asset management, and trade and structured finance. The company was founded by Sunny George Verghese in 1989 and is headquartered in Singapore.

Financial Highlights

Dec 2019 SGDUSD
Revenue32,992.72M24,184.71M
Gross Profit1,175.89M861.96M
Operating income618.12M453.10M
Income before tax608.27M445.88M
Net income509.10M373.18M
EBITDA1,118.45M819.86M
Diluted EPS0.150.11
Dividends Per Share0.080.05
Total Assets25,670.36M19,090.73M
Total liabilities20,176.16M15,004.77M
Total equity5,386.12M4,005.59M
Operating cash flow646.28M473.74M
Currency in SGDCurrency in USD

Historical Data

 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 18,820.48M 20,587.03M 26,272.52M 30,479.05M 32,992.72M
Gross Profit 948.57M 1,188.27M 936.43M 1,322.01M 1,175.89M
Operating income 555.89M 741.44M 443.11M 758.12M 618.12M
Income before tax 157.17M 433.40M 630.89M 380.61M 608.27M
Net income 49.16M 317.74M 524.10M 292.38M 509.10M
EBITDA 783.88M 1,094.92M 823.79M 1,150.95M 1,118.45M
Diluted EPS 0.01 0.11 0.17 0.09 0.15
Dividends Per Share 0.06 0.06 0.07 0.07 0.08
Total Assets 20,792.35M 23,468.88M 22,298.54M 23,446.81M 25,670.36M
Total liabilities 15,670.79M 18,764.99M 16,723.29M 18,029.16M 20,176.16M
Total equity 4,880.98M 4,467.92M 5,397.80M 5,278.96M 5,386.12M
Operating cash flow -543.57M 619.61M 1,680.11M 1,484.26M 646.28M
 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 13,685.05M 14,911.13M 19,031.46M 22,588.73M 24,184.71M
Gross Profit 689.74M 860.66M 678.33M 979.77M 861.96M
Operating income 404.21M 537.02M 320.98M 561.86M 453.10M
Income before tax 114.28M 313.91M 457.01M 282.08M 445.88M
Net income 35.75M 230.14M 379.65M 216.69M 373.18M
EBITDA 569.98M 793.05M 596.74M 853.00M 819.86M
Diluted EPS 0.01 0.08 0.12 0.06 0.11
Dividends Per Share 0.04 0.04 0.05 0.05 0.05
Total Assets 14,656.43M 16,244.81M 16,685.53M 17,202.36M 19,090.73M
Total liabilities 11,046.27M 12,988.85M 12,513.68M 13,227.56M 15,004.77M
Total equity 3,440.58M 3,092.63M 4,039.06M 3,873.04M 4,005.59M
Operating cash flow -395.25M 448.78M 1,217.04M 1,100.02M 473.74M

Valuation Measures

Dec 2019
PER11.32
ROA2.07%
ROE9.54%
Operating margin1.87%
Profit margin1.54%

Key executives

  • Group Chief Executive Officer & Executive Director: Sunny George Verghese
  • Group Chief Financial Officer & Managing Director: Neelamani Muthukumar
  • Chief Risk & Compliance Officer, Managing Director: Jagdish Achleshwar Prasad Parihar
  • CEO-Coffee & Managing Director: Vivek Verma
  • Chief Executive Officer-Edible Nuts & MD: Ashok Krishen

Shareholders

  • Temasek Capital Pte Ltd. (52.1%)
  • Mitsubishi Corp. (16.9%)
  • Kewalram Chanrai Holdings Ltd. (6.8%)
  • Orbis Investment Management Ltd. (6.7%)
  • VERGHESE SUNNY GEORGE (4.1%)
  • Olam International Ltd. (2.3%)
  • ANANTHARAMAN SHEKHAR (0.5%)
  • The Vanguard Group, Inc. (0.4%)
  • Dimensional Fund Advisors LP (0.1%)
  • MAK SENG FOOK (0.0%)

Contact Details

  • Website:http://www.olamgroup.com
  • Address: 7 Straits View, Marina One East Tower, Singapore, 018936, Singapore
  • Phone: +65.6339.4100

Related Companies

  • Olam Enterprises India Pvt Ltd.
  • Olam SRL (Paraguay)
  • Olam Food Ingredients
  • Olam Palm Gabon SA
  • Olam International Ltd. /Arise Industrial Zones/
  • Aviv Tanzania Ltd.
  • Olam Deutschland GmbH
  • Olam (Uganda) Ltd.
  • Olam Cocoa Deutschland GmbH
  • Olam Agro Peru SAC
  • Olam Italia SRL
  • Olea Investment Holdings Pte Ltd.
  • Olam International UK Ltd.
  • Outspan Taiwan Ltd.
  • Invenio Merx LP
  • Olam Treasury Pte Ltd.
  • Olam International - DMCC
  • Olam Agricola Ltda.
  • Congolaise Industrielle des Bois SA
  • Outspan Mexico SA de CV
  • Olam Agro Colombia SAS
  • Olam Agro Mexico SA de CV
  • Olam Holdings, Inc.
  • Olam Agro Guatemala SA
  • Olam Honduras SA de CV
  • Olam Nicaragua SA
  • Argonuts Ltd. /Hazelnut Processing Plant/
  • Outspan Guatemala SA
  • Outspan Ecuador SA
  • Olam Suisse SARL

Competitors

  • Barry Callebaut AG
  • Sensient Technologies Corporation
Last Updated on 18 Sep, 2020

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