Sunny Verghese, CEO, joins Olam’s Agri Board, among other key appointments. Image: Olam
The Olam Group has announced its latest half-year results. Sales rose by 9.1% to $26.9 billion. The company’s Ofi Ingredients division led the renewed growth, writes Neill Barston.
Of particular note, the company’s agricultural interests continued to account for the largest share of revenue, generating $16.7 billion for the period, a modest increase of 2.7%. The sector continues to face international challenges due to global economic headwinds, which have been negatively impacted by the ongoing wars in Ukraine and Gaza, which have had destabilizing effects.
However, the company was encouraged by the results of ofi, which generated revenues of US$9.6 billion, an increase of 24% year-on-year, as demand for innovative market solutions, including in the snack and confectionery sector, remains high worldwide.
The company said it remains committed to its overall strategic objective of listing both ofi and Olam Agri, while also evaluating other strategic options to enhance value. According to the company, it will now consider both internal and external factors, such as the business performance of all three operating groups, the prevailing conditions in the capital markets and global macroeconomic developments, as well as obtaining all necessary regulatory approvals.
Sunny Verghese (pictured), co-founder and CEO of Olam Group, said: “We delivered EBIT growth and stable PATMI in the first half of 2024 despite high interest rates and challenging market conditions. This reflects the collective resilience of the Group, including ofi and Olam Agri.
“We remain committed to implementing our reorganization plan to unlock value. We continue to evaluate all internal and external factors that would underpin the success of the planned IPOs of ofi and Olam Agri, while also considering all other strategic options.”
A. Shekhar, CEO of ofi, said the company’s integrated supply chains have proven resilient despite external challenges and market volatility in many of its international territories.
He commented: “We are very pleased with our EBIT performance in the first half of 2024, which demonstrates the tremendous strength of our integrated supply chains and also reflects the ability to optimize our margins and earnings in the face of significantly increased capital deployment levels and unprecedented volatility in many of our markets this year. We are grateful for the continued support of our customers, suppliers and other stakeholders as we navigated these difficult market conditions to continuously deliver an increasingly diversified portfolio of food ingredients and solutions with higher levels of innovation and sustainability impact.
“The recent opening of a new and expanded Customer Solutions Center in Chicago and the launch of the renewed ‘Choices for Change’ sustainability strategy are examples of our ongoing investments in deepening our capabilities and improving the differentiation we can offer our customers.
“Although commodity markets are currently volatile and may continue to be so, ofi is well positioned to support and create value for its customers. We remain cautiously optimistic about achieving our medium-term forecast of adjusted EBIT growth in the high single-digit range.”
