UPDATE 2-Singapore's Olam profit inches up, but higher costs weigh
(Adds details on results, outlook, comments and background)
Aug 12 (Reuters) - Commodity trader Olam Group Ltd on Friday posted a marginal rise in net profit for the first half of fiscal 2022, as a weak performance in the food ingredients unit partially countered strong showing in its Olam Agri business.
The company was hit by rising costs due to global supply chain snarls following the Russia-Ukraine conflict and broadening inflationary pressures.
"The significant demand growth rate and pick-up seen in H2 2021 has slowed down in H1 2022 after the geopolitical crisis, accompanied by the hard pandemic lockdowns in China," Olam said.
Olam Agri, which trades grains and animal feed, edible oils, rice, cotton and commodity financial services, still posted a 49.4% jump in its first-half operating profit.
"Olam Agri is poised to build on its track record by taking advantage of the rising demand for food staples and agri-industrials raw materials as well as the shift to protein-based diets in high-growth emerging end-consumption markets," said Chief Executive Officer Sunny Verghese.
For the six months ended June 30, Olam Group posted a profit attributable of S$429.1 million ($313.28 million), up 1.8% from the S$421.5 million a year ago. It declared an interim dividend of 4 Singapore cents per share, in line with last year.
Meanwhile, the Singapore-based company said it remains committed and fully prepared to pursue its long-delayed initial public offering and demerger of Olam Food Ingredients (OFI), pending favourable market conditions.
In August 2021, Olam Group announced plans for OFI to pursue a primary listing in London and a secondary listing in Singapore in the first half of 2022, but increased market volatility has forced the company into several delays.
Olam Group said it was exploring strategic options for its Olam Ventures and Olam Technology and Business Services businesses.
($1 = 1.3697 Singapore dollars)
(Reporting by Harish Sridharan and Riya Sharma in Bengaluru; Editing by Krishna Chandra Eluri, Maju Samuel and Sherry Jacob-Phillips)
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