SINGAPORE- Olam Group, one of the world’s biggest agricultural commodity traders, recently announced that it is targeting the  Singapore-Saudi IPO of its agricultural unit by the first half of 2024.

According to Euromoney, there have been much fewer listings in the recent past that go beyond real estate investments, and Olam’s listing will be a welcome exemption. 

Moreover, going ahead with the Saudi listing at the same time is a very unique situation. Euromoney provides that Olam will be the first truly global company to list in Saudi and the first non-GCC (Gulf Cooperation Council) company to do so. 

According to the company’s statement in May 2023, the IPO in Singapore and Saudi Arabia was intended for the first half of this year, but the company announced that it was pushing the IPO further. 

Additionally, the company previously said it plans to list its Olam Food Ingredients unit as part of a business overhaul. The company reiterated that the listing will take place after Olam Agri’s IPO. 

Olam Group recently reported a profit attributable of US$35.6 million for the six months ended June 30, compared with US$31.51 million a year earlier. 

The agribusiness (which includes ofi – its cocoa and ingredients division) reported Operational PATMI (profit after tax and minority interest) of U$136 million so far this year. 

Additionally, EBIT for the company’s food ingredients segment, which trades cocoa, coffee, nuts, dairy, and spices, rose 3.4%.

Olam Agri, which trades grains and animal feed, edible oils, rice, and cotton, posted first-half earnings before interest and tax (EBIT) that fell 9%.

Australian orchards depressed profits

Meanwhile, the commodity trader reported an 88.8% fall in first-half profit on lower crop yield from its almond orchards in Australia.

This was evident across the entire almond industry in Australia for the 2022-23 growing season, reflecting lower bee activity during pollination and unseasonal cold, wet conditions through the growing and pre-harvest periods. Our crop experts and agronomists concur with external analysis that the 2023 crop was an aberration and the orchards are expected to see yields return to their normal levels from 2024 and beyond,” A. Shekar, ofi’s CEO, said.

Last month, the company flagged lower bee activity during pollination, adverse weather impacts, including unseasonal cold amid excessive rain and flooding, led to an unexpected drop in yield and quality of the 2023 almond crop in Australia. 

We have been budgeting for higher interest costs and optimizing cost structures overall. We are however not immune to near-term impact from rapid benchmark interest rate hikes affecting companies globally,” CFO N Muthukumar said.

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