Olam Co-Founder and Group CEO, Sunny Verghese said:

Our strongest operational earnings since inception reflect the underlying strength and resilience of our businesses despite the impacts of Covid-19 and is a testament to the strength of our business model, commitment of our people and depth of our customer and supplier partnerships across more than 60 countries.

“We continue to execute our Re-organisation with ofi’s planned concurrent listings in London and Singapore, representing the best combination of listing venues. We are excited about the prospects of listing ofi as an attractive play for the growing demand for natural, plant-based ingredients and value-added solutions, which are sustainably sourced and traceable. Separately, we are evaluating various strategies to maximise OGA’s long-term growth potential and value enhancement within the Group as it continues with its plan for carve-out, potential IPO and demerger by H1 2023.”

"Looking forward, we expect our industry to continue its recovery in the second half of the year, benefiting from the tailwind of favourable macro conditions following the snap back from the worst impacts of Covid-19. Notwithstanding the differential impact of Covid-19 globally, Olam continues to play an important role in providing essential food staples, food ingredients, feed and fibre to customers around the world in a safe, responsible and sustainable way."

“We are seeing market conditions and sentiments beginning to improve as economies snap back from the worst impacts of Covid-19 in 2020 and we expect this favourable market environment to continue to improve in 2021.”

Olam Group CFO, N Muthukumar said:

“Even as we deployed significant capital expenditure for organic growth and strategic acquisitions, we continued to maintain a robust balance sheet, further strengthened by the recently concluded rights issue.

“We continued to diversify funding sources and innovate on financing, including a unique two-tier AtSource-linked sustainability financing facility aggregating US$1,450 million. We continue to make good progress on our Re-organisation Plan and will formalise the cost plans and capital structure for ofi and OGA, to meet their respective needs, while driving profitable growth and improving returns.”

olam food ingredients (ofi)³

A global leader at the forefront of food and beverage consumer trends, delivering sustainable, natural, and plant-based ingredients and solutions and serving large, attractive and high growth end-use categories.

• Revenue increased 12.6% to S$6.8 billion, driven principally by stronger sales from the Ingredients & Solutions segment, which made up for the reduction in contribution from Global Sourcing segment.
• EBIT grew strongly at 22.9% to S$316.3 million in H1 2021, demonstrating a strong recovery from the impact that Covid-19 had on some of its businesses in H1 2020.

Olam Group Executive Director and CEO of ofi, A. Shekhar said:

“We had a strong first-half as we continued to integrate and drive synergies across our portfolio. We are also making disciplined investments in specific product, channel and category expansion opportunities identified across ofi’s on-trend and growing portfolio. This includes our newly acquired business in Olde Thompson, the green chilli pepper business from Mizkan and the dried onion ingredients business in the US, all of which already started contributing positively to our earnings in H1 2021.

“The results further demonstrate that ofi is a strong business that is uniquely positioned to take advantage of long-term consumer trends within the food and beverage industry. The integrated global network, servicing large, attractive and growing end-use categories, within an expanding on-trend ingredients portfolio, makes us a compelling investment case for anyone looking to tap into growing global demand for food that is healthier, traceable and sustainable.”

Olam Global Agri (OGA)⁴

OGA is a market leading and differentiated global food, feed and fibre agri-business with a proven track record delivering high returns focused on high-growth emerging markets.

• Continued strong operating performance with revenue growing 48.2% to S$15.5 billion. All businesses under OGA contributed to the growth, including the Grains, Integrated Feed & Proteins business, the all-round strong performance from the Rice business, and the Cotton and Edible Oils businesses turning the corner amid a recovery in demand post the worst impacts of Covid-19.
• EBIT surged by 58.9% to S$407.5 million on higher contribution from all segments, including an exceptional performance by the Fibre, Industrial & Ag Services. 

Mr Verghese, who is CEO of OGA and OIL said:

“OGA delivered another strong set of results across all its segments as it continues to take advantage of key secular trends underpinning the food and agricultural sector: The food security agenda, rising protein consumption, emerging markets food staples and industrial and fibre demand growth, rising technology adoption and sustainability focus. Together with strong risk and operational management capabilities, this will continue to drive OGA’s continued success.

“We are particularly pleased with the strong recovery of our Fibre, Industrial & Ag Services segment from the worst impacts of Covid-19 in the prior period.”

Olam International Limited (OIL)⁵

As parent company of ofi and OGA, OIL plays a key role to unlock the full value of the Olam Group by providing interim stewardship to the new operating groups until carve-out, IPO and demergers are completed, responsibly divesting the de-prioritised businesses and assets, nurturing gestating businesses to full potential, incubating new engines for future growth, developing key cross cutting initiatives, and providing shared services to the new operating groups.

• Lower revenue of 7.3% at S$551.0 million, with the divestments and closures of de-prioritised assets, including Olam Tomato Processors in the US, the exit from sugar refining in Indonesia and the disposal of a sugar mill in India in 2020.
• EBIT losses narrowed to $82.2 million as De-prioritised/Exiting assets reduced losses from S$35.8 million to S$12.8 million in H1 2021.

¹ Operational PATMI is Net Profit After Tax and Minority Interest excluding exceptional items, which are one-off and non-recurring

² Refer to news release at https://www.olamgroup.com/news/all-news.html entitled “Olam International announces Olam Food Ingredients’ intention to seek primary listing on the London Stock Exchange, with concurrent listing in Singapore”

³ Consisting of the Cocoa, Coffee, Nuts, Spices and Dairy businesses, OFI is made up of two segments – Global Sourcing and Ingredients & Solutions.

⁴ Consisting of the Grains and Integrated Feed & Proteins, Edible Oils, Rice, Cotton, Rubber, Wood Products and Commodity Financial Services businesses, OGA has three segments – Food & Feed - Origination & Merchandising; Food & Feed - Processing & Value-added; and Fibre, Industrial & Ag Services.

⁵ As parent company holding OFI and OGA until carve-out, IPO and demerger, OIL consists of De-prioritised/Exiting Assets, Gestating Businesses (Olam Palm Gabon, Packaged Foods, Infrastructure and Logistics business), and Incubating Businesses (Engine 2 growth platforms) segments. OIL financials are standalone financials and do not include the consolidation of ofi and OGA.

Notes to Editors

Re-organisation of Olam

Olam Group has been re-organised into two new operating groups olam food ingredients (“ofi”) and Olam Global Agri (“OGA”) with the Company Olam International (“OIL”) as parent holding the two groups until carve-out, IPO and demergers are completed.

ofi is a global leader at the forefront of food and beverage consumer trends, delivering sustainable, natural, and plant-based ingredients and solutions and serving large, attractive and high growth end-use categories.

OGA is a market leading and differentiated global food, feed and fibre agri-business with a particular focus in high-growth emerging markets with proven expertise, processing capabilities and a global origination footprint.

OIL plays a key role to unlock the full value of the Olam Group. OIL provides interim stewardship to the operating groups until carve-out, IPO and demergers are completed. In addition, it will responsibly divest the de-prioritised businesses and assets ear-marked for exit, nurture gestating businesses to full potential, incubate new engines for future growth, develop key cross cutting initiatives, and provide shared services to the new operating groups.

H1 2021 Financials for Olam Group Consolidated and Operating Groups

View and Download Documents