UOB Kay Hian Wednesday, 30 April 2025
Wilmar International (WIL SP) 1Q25 Results Analysis: Steady Performance Amidst Legal Challenges, BUY Maintained
Company Overview: Wilmar International Ltd (WIL SP)
Wilmar International operates across the entire agricultural commodity value chain, encompassing origination, processing, merchandising, and manufacturing of a diverse portfolio of branded consumer products. The company is a major player in the Consumer Staples sector.
Stock Data (as of report date):
Share Price: S$3.02
Target Price: S$3.45
Upside Potential: +14.2%
Bloomberg Ticker: WIL SP
Shares Issued: 6,242.7 million
Market Cap: S$19,339.2 million (US$14,565.8 million)
3-Month Avg Daily Turnover: US$9.7 million
52-Week High/Low: S$3.55 / S$2.99
Major Shareholders: Archer Daniels Midland (22.3%), Kuok Brothers (18.8%), Kuok Khoon Hong (12.8%)
FY24 NAV/Share: US$3.14
FY24 Net Debt/Share: US$3.36
1Q25 Financial Performance: In Line with Expectations
UOB Kay Hian reports that Wilmar International’s first-quarter 2025 (1Q25) results met expectations. While earnings improvement is anticipated for the full year 2025, driven by better refining margins, the ongoing legal case concerning 2021-22 palm oil fraud allegations in Indonesia could potentially weigh on the share price. The total dividend per share (DPS) declared was S$0.16, representing a 6% decrease. The HOLD recommendation is maintained with a target price of S$3.18 (Note: The initial summary section mentions HOLD and S$3.18, but the main recommendation later states BUY and S$3.45. The body text will reflect the BUY rating and S$3.45 target price as detailed in the main analysis section).
1Q25 Results Snapshot
| Year to 31 Dec (US\$m) |
1Q25 |
qoq % chg |
yoy % chg |
Remarks |
| Total Revenue |
36,444 |
0.3% |
|
|
| Total PBT |
1,003 |
(10.8%) |
|
|
| Food Products PBT |
355.8 |
70.2% |
|
Includes US\$100m pre-tax gain from Luhua share swap exercise |
| Feed and Industrial Products PBT |
295.4 |
(10.5%) |
|
|
| Plantations & Sugar Milling PBT |
215.3 |
(20.0%) |
|
|
| Net Profit |
590.0 |
(23.3%) |
|
|
| Core Net Profit |
581.0 |
(10.4%) |
|
Excluding net loss of US\$22.8m from same share swap |
| PBT Margin (%) |
2.8% |
(0.3) ppt |
|
|
| Food Products PBT Margin (%) |
2.3% |
0.7 ppt |
|
|
| Feed and Industrial Products PBT Margin (%) |
1.3% |
(0.2) ppt |
|
|
| Plantations & Sugar Milling PBT Margin (%) |
10.5% |
(1.2) ppt |
|
|
| Core Net Profit Margin (%) |
1.6% |
(0.2) ppt |
|
|
Source: Wilmar International, UOB Kay Hian
Detailed Results Analysis
Results Alignment: Wilmar reported a 1Q25 core net profit of US$343 million, marking a 4% increase year-on-year (yoy) but a 2% decrease quarter-on-quarter (qoq). This performance is considered in line with expectations, representing 23% of UOB Kay Hian’s and 24% of consensus full-year forecasts.
Quarterly vs. Yearly Performance: The slight sequential dip (-2% qoq) in core earnings is attributed to lower sales volume, which typically peaks in the fourth quarter. However, the 4% yoy growth was driven by improved contributions from the food products and plantations & sugar milling segments. This growth partially offset weaker performance in the feed and industrial products segment. Additionally, the group benefited from a higher share of profits from joint ventures and associates in China, India, and Southeast Asia.
Cash Flow and Gearing: Operating cash flow saw a robust increase of 16% yoy to US$2.1 billion, corresponding with higher earnings and reduced working capital needs. Consequently, the net gearing position improved to 0.83x from 0.94x at the end of 2024.
Segment Performance Highlights (1Q25)
Food Products: Overall sales volume in this segment grew by 2.5% yoy. Consumer products volume increased by 3.3% yoy, while medium pack & bulk sales volume rose by 2.2% yoy.
Plantations & Sugar Milling: The segment’s stronger performance compared to 1Q24 was primarily due to higher selling prices for palm oil.
Feed and Industrial Products: Despite a 3.9% yoy increase in oilseeds & grains sales volume and a 13.8% yoy rise in tropical oils volume, the overall segment sales volume decreased by 2.8% yoy. This was mainly caused by a significant drop in sugar merchandising sales volume (-41.5% yoy). Crushing margins improved during the quarter, but operating conditions for the tropical oils business remained challenging.
Yihai Kerry Arawana (YKA) Performance
YKA, Wilmar’s key subsidiary historically contributing 60-70% of the group’s net profit, reported positive results.
In 1Q25, YKA’s net profit increased by 11% yoy to Rmb981 million, supported by a 3% yoy revenue growth.
Sequentially, although revenue fell by 7% qoq, YKA’s core profit improved by 17% qoq compared to 4Q24.
YKA 2024 Full Year Results Recap
| (RMB m) |
2023 |
2024 |
yoy % chg |
| Revenue |
251.5 |
238.9 |
(5.0%) |
| Net profit |
2.85 |
2.5 |
(12.1%) |
Source: YKA
Stock Impact and Outlook
Indonesia Palm Oil Probe: A significant factor impacting the stock is the unresolved Indonesian palm oil bribery probe related to export permits in 2022. Although Wilmar was acquitted by an Indonesian court in March 2025, authorities subsequently arrested the judges involved on bribery allegations related to the verdict and filed a cassation (appeal) against the acquittal. An employee of Wilmar has also been detained and named as a suspect. Wilmar maintains its innocence, but UOB Kay Hian believes these ongoing investigations could create a near-term overhang on the share price.
Management Guidance:
The outlook for the remainder of 2025 is expected to be uncertain, with increased volatility potentially stemming from recently introduced US tariffs.
Despite uncertainties, Wilmar anticipates that its 2025 results will remain satisfactory, banking on its diversified and resilient integrated business model.
Earnings Forecast and Valuation
Earnings Revision: UOB Kay Hian makes no changes to its existing earnings forecasts for Wilmar. Management was scheduled to host a post-1Q25 analyst briefing on April 30th.
Valuation & Recommendation: The BUY recommendation is maintained with an unchanged target price of S$3.45. This valuation is derived using a Sum-of-the-Parts (SOTP) methodology based on 2025F earnings per share (EPS), applying the following Price-to-Earnings (PE) multiples:
Food Products: 17x
Feeds & Industrial Products: 11x
Plantations & Sugar Mills: 11x
SOTP Valuation Breakdown
| Segment |
PE (X) |
S\$/Share |
| Food Ingredient |
17 |
1.19 |
| Feed & Oils & Fats |
11 |
1.48 |
| Plantations & Sugar Milling |
11 |
0.45 |
| Associates & JV |
8 |
0.33 |
| Total |
|
3.45 |
Source: UOB Kay Hian
Potential Share Price Catalysts
China Recovery: Given that YKA is Wilmar’s largest profit contributor, a stronger-than-expected economic recovery in China could positively impact earnings and market sentiment towards Wilmar.
Strategic Investors in AWL: The potential entry of new strategic investors into Adani Wilmar Limited (AWL) could open up new distribution channels, enhance capabilities, or introduce complementary businesses, helping to access new markets or strengthen AWL’s position in India.
Key Financial Projections
Profit & Loss Forecast
| Year to 31 Dec (US\$m) |
2024 |
2025F |
2026F |
2027F |
| Net turnover |
67,379.1 |
79,001.6 |
84,993.7 |
90,866.8 |
| EBITDA |
3,528.6 |
3,919.6 |
4,275.8 |
4,387.3 |
| Deprec. & amort. |
1,297.5 |
1,312.8 |
1,354.5 |
1,394.1 |
| EBIT |
2,231.0 |
2,606.8 |
2,921.3 |
2,993.2 |
| Associate contributions |
219.9 |
237.5 |
256.5 |
277.0 |
| Net interest income/(expense) |
(807.3) |
(785.0) |
(832.2) |
(730.6) |
| Pre-tax profit |
1,745.1 |
2,059.3 |
2,345.6 |
2,539.5 |
| Tax |
(516.6) |
(428.3) |
(487.9) |
(528.2) |
| Minorities |
(58.7) |
(114.2) |
(130.0) |
(140.8) |
| Net profit (adj.) |
1,169.8 |
1,516.8 |
1,727.7 |
1,870.5 |
Source: Wilmar International, Bloomberg, UOB Kay Hian
Balance Sheet Forecast
| Year to 31 Dec (US\$m) |
2024 |
2025F |
2026F |
2027F |
| Fixed assets |
15,619.5 |
16,121.9 |
16,609.2 |
17,054.6 |
| Other LT assets |
10,741.0 |
10,499.2 |
10,252.0 |
10,018.4 |
| Cash/ST investment |
7,120.0 |
6,396.4 |
8,587.2 |
10,878.7 |
| Other current assets |
26,091.7 |
26,904.7 |
25,688.5 |
24,453.1 |
| Total assets |
59,572.2 |
59,922.2 |
61,136.9 |
62,404.8 |
| ST debt |
21,722.7 |
21,722.7 |
21,722.7 |
21,722.7 |
| Other current liabilities |
7,839.1 |
7,314.6 |
7,614.2 |
7,907.9 |
| LT debt |
6,627.4 |
6,977.4 |
7,177.4 |
7,377.4 |
| Shareholders’ equity |
19,860.7 |
20,374.4 |
20,959.4 |
21,592.9 |
| Minority interest |
2,530.9 |
2,645.1 |
2,775.1 |
2,915.9 |
| Total liabilities & equity |
59,572.2 |
59,922.2 |
61,136.9 |
62,404.8 |
Source: Wilmar International, Bloomberg, UOB Kay Hian
Cash Flow Forecast
| Year to 31 Dec (US\$m) |
2024 |
2025F |
2026F |
2027F |
| Operating Cash Flow |
1,371.8 |
3,662.8 |
3,716.3 |
3,862.0 |
| Investing Cash Flow |
(1,047.7) |
(1,324.5) |
(1,324.5) |
(1,324.5) |
| Financing Cash Flow |
667.2 |
113.2 |
(1,791.6) |
(114.0) |
| Net cash inflow (outflow) |
991.3 |
2,451.5 |
600.2 |
2,423.5 |
| Beginning cash & cash equivalent |
4,380.8 |
3,042.7 |
5,396.4 |
7,587.2 |
| Ending cash & cash equivalent |
5,372.1 |
5,494.2 |
5,996.6 |
10,010.7 |
Source: Wilmar International, Bloomberg, UOB Kay Hian
Key Financial Metrics & Ratios
| Year to 31 Dec |
2023 |
2024 |
2025F |
2026F |
2027F |
| EPS (US\$ cent) |
24.5 |
18.3 |
23.7 |
27.0 |
29.2 |
| PE (x) |
9.4 |
12.6 |
9.7 |
8.5 |
7.9 |
| P/B (x) |
0.7 |
0.7 |
0.7 |
0.7 |
0.7 |
| EV/EBITDA (x) |
11.7 |
11.1 |
10.0 |
9.2 |
9.0 |
| Dividend yield (%) |
5.1 |
4.8 |
4.7 |
5.3 |
5.8 |
| Net margin (%) |
2.3 |
1.7 |
1.9 |
2.0 |
2.1 |
| Net debt/(cash) to equity (%) |
111.8 |
106.9 |
109.5 |
96.9 |
84.4 |
| Interest cover (x) |
4.5 |
4.4 |
5.0 |
5.1 |
6.0 |
| ROE (%) |
7.6 |
5.8 |
7.5 |
8.4 |
8.8 |
| Turnover Growth (%) |
|
0.3 |
17.2 |
7.6 |
6.9 |
| EBITDA Growth (%) |
|
5.0 |
11.1 |
9.1 |
2.6 |
| Adj. Net Profit Growth (%) |
|
(25.3) |
29.7 |
13.9 |
8.3 |
| EPS Growth (%) |
|
(25.3) |
29.7 |
13.9 |
8.3 |
Source: Wilmar International, Bloomberg, UOB Kay Hian
