$OLAM INTERNATIONAL LIMITED(O32.SI)$

Olam reports 13.1% lower earnings for 1Q21, announces $601.7 million rights issue

1. Olam International has announced a fully underwritten three-for-20 rights issue an issue price of $1.25 per share, which is expected to raise gross proceeds of $601.7 million.

2. The company also announced its 1QFY2021 ended March business update, in which it reported a 13.1% y-o-y decline in earnings to $155.6 million.

3. Olam attributes the lower earnings to the absence of net exceptional gains compared to the previous year. In the 1QFY2020, Olam had recognised gains of $43.2 million from the divestments of its stake in Far East Agri as well as partial stake sales in the ARISE infrastructure and logistics businesses.

4. Looking ahead, while uncertainties remain due to the ongoing Covid-19 situation, Olam is optimistic about its prospects. "[The] economic outlook and prospects for the group remain positive, with the industry poised for recovery in 2021, aided by growing demand and tight commodity supplies. With 80-85% of the Group’s revenues in the food category, where demand is less sensitive to recession or economic downcycles, the group believes that it will be able to better navigate the market uncertainties in 2021," the company stated in its business update.

5. “This rights issue, which is fully sub-underwritten by our major shareholder Temasek, provides shareholders who have supported us all these years an opportunity to further participate in Olam’s Strategic Plan for future growth,” says Olam group CEO and co-founder Sunny Verghese.

https://www.theedgesingapore.com/news/equity-raising/olam-reports-131-lower-earnings-1q21-announces-6017-million-rights-issue