CGS International
May 1, 2025
Wilmar International: 2025 Outlook Amid Global Volatility, Sector Peer Review, and ESG Progress
Wilmar International Faces Uncertain 2H25 Earnings as Global Volatility Rises
Wilmar International’s first quarter 2025 results reflect a complex picture for Asia’s agribusiness giant, with global economic uncertainties casting a shadow over its second-half earnings prospects. While the company’s 1Q25 core net profit of US$343 million was down 3% quarter-on-quarter but up 4% year-on-year, this figure accounted for 25% of the full-year forecast and 23% of consensus, deemed broadly in line with market expectations.
The quarterly drop was attributed to lower-than-expected sales in feed and industrial products, particularly a sharp 62% quarter-on-quarter and 42% year-on-year decline in sugar sales, linked to sales timing.
Soybean crushing margins improved in 1Q25, helping offset weaker segments.
Year-on-year growth was bolstered by stronger consumer product sales, higher palm oil prices, and increased contributions from associates and joint ventures.
2H25 Outlook: Soybean Strength, Consumer Softness, and Global Risks
Looking ahead, Wilmar’s net profit for upcoming quarters is expected to be underpinned by:
Higher soybean crushing utilization and robust demand for soybean meal, especially from China’s expanding hog farming sector.
Increased use of cheaper soybean meal in animal feed, supporting margins.
Soybean crushing margins are projected to remain strong for 2025.
However, several offsetting headwinds persist:
Palm oil refining margins remain challenged.
The food segment is likely to stay soft, with subdued sales and a possible shift to more affordable products, impacting mix and margins.
Plantation and sugar milling segments are under pressure as Crude Palm Oil (CPO) prices have dropped 17% year-to-date, and sugar prices are expected to remain weak throughout 2025.
Wilmar also faces:
Ongoing land confiscation and a bribery investigation tied to a palm oil corruption case in Indonesia.
Rising geopolitical volatility, including new US tariffs that may increase operational risk and costs.
Investment Recommendation and Financial Targets
Rating: Hold (no change)
Target Price: S$3.15 (2.9% upside from current S$3.06)
Current Market Cap: US$14.6 billion (S$19.1 billion)
Free Float: 35%
Major Shareholders: PPB Group & Kuok Group (29.9%), Archer Daniels Midland (22.3%), Kuok Khoon Hong (12.8%)
Upside Risks: Stronger-than-expected Chinese consumption, boosting food segment profitability.
Downside Risks: Adverse court rulings in Indonesia, further escalation of China-US trade tensions.
Wilmar International: Financial Performance Snapshot
| Year |
Revenue (US\$m) |
Operating EBITDA (US\$m) |
Net Profit (US\$m) |
Core EPS (US\$) |
FD Core P/E (x) |
DPS (US\$) |
Dividend Yield (%) |
Net Gearing (%) |
P/BV (x) |
ROE (%) |
| 2023A |
67,155 |
3,642 |
1,525 |
0.28 |
8.32 |
0.13 |
5.41 |
100 |
0.73 |
8.80 |
| 2024A |
67,379 |
3,602 |
1,170 |
0.19 |
12.56 |
0.13 |
5.42 |
96 |
0.74 |
5.84 |
| 2025F |
73,970 |
4,058 |
1,380 |
0.22 |
10.65 |
0.13 |
5.38 |
91 |
0.72 |
6.84 |
| 2026F |
77,300 |
4,142 |
1,467 |
0.23 |
10.01 |
0.13 |
5.38 |
88 |
0.70 |
7.06 |
| 2027F |
80,825 |
4,311 |
1,501 |
0.24 |
9.79 |
0.13 |
5.38 |
85 |
0.67 |
6.99 |
Additional metrics:
Operating EBITDA margin: 5.42% (2023A), 5.35% (2024A), 5.49% (2025F)
Net Cash per Share: (US$3.63) in 2023A, (US$3.36) in 2025F
Gross Interest Cover: Improving from 1.94x (2023A) to 2.18x (2025F)
Quarterly Segment Performance and Margins
1Q25 Revenue: US$16.2 billion (+3.3% yoy, -13.3% qoq)
EBITDA: US$1.09 billion (+19.3% yoy, +24.2% qoq)
Net Profit: US$343.9 million (+13.5% yoy, +2.4% qoq)
Segment Sales Volumes:
Food products: 8,393k MT (+2.5% yoy, -3.3% qoq)
Consumer products: 2,510k MT (+3.3% yoy, +25.2% qoq)
Medium pack/bulk: 5,883k MT (+2.2% yoy, -11.8% qoq)
Feed/industrial: 14,228k MT (-2.8% yoy, -29.6% qoq)
Tropical oils: 6,185k MT (+3.9% yoy, -11.3% qoq)
Oilseeds & grains: 6,096k MT (+13.8% yoy, -24.4% qoq)
Sugar: 1,947k MT (-41.5% yoy, -62.4% qoq)
Soybean crushing margins in China saw a notable improvement in 1Q25.
Peer Comparison: Regional Agribusiness Landscape
Wilmar is benchmarked against regional peers and global agribusiness majors. Key metrics for 2025 and 2026:
| Company |
Ticker |
Reco |
Price (LC) |
TP (LC) |
Market Cap (US\$m) |
P/E (x) 25F/26F |
Net Gearing (%) |
P/BV (x) 25F/26F |
ROE (%) 25F/26F |
EV/EBITDA (x) 25F/26F |
Dividend Yield (%) 25F/26F |
| Wilmar Int’l |
WIL SP |
Hold |
3.06 |
3.15 |
14,611 |
10.6 / 10.0 |
91.1 / 88.3 |
0.7 / 0.7 |
6.8 / 7.1 |
8.6 / 8.5 |
5.4 / 5.4 |
| Golden Agri-Resources |
GGR SP |
NR |
0.245 |
NA |
2,270 |
6.5 / 6.1 |
51.0 / 48.1 |
0.5 / 0.5 |
13.1 / 12.2 |
3.7 / 3.7 |
2.0 / 4.0 |
| First Resources |
FR SP |
NR |
1.44 |
NA |
1,630 |
7.8 / 8.0 |
Net Cash |
1.1 / 1.0 |
13.7 / 12.6 |
5.1 / 5.1 |
6.0 / 6.5 |
| Bunge Global |
BG US |
NR |
77.81 |
NA |
10,864 |
10.9 / 10.4 |
28.1 / 29.9 |
1.2 / 1.1 |
11.4 / 11.4 |
6.8 / 6.9 |
2.6 / 2.6 |
| Archer-Daniels-Midland |
ADM US |
NR |
49.43 |
NA |
23,654 |
10.8 / 10.6 |
31.9 / 30.1 |
1.3 / 1.2 |
11.2 / 10.9 |
7.5 / 7.6 |
3.3 / 3.5 |
| IOI Corp Bhd |
IOI MK |
Reduce |
3.66 |
3.25 |
5,247 |
16.5 / 15.7 |
6.1 / 3.1 |
1.8 / 1.7 |
11.0 / 11.1 |
10.2 / 9.6 |
3.0 / 3.2 |
| Genting Plantations |
GENP MK |
Hold |
4.83 |
5.90 |
1,001 |
14.7 / 14.0 |
21.1 / 18.8 |
0.8 / 0.8 |
5.5 / 5.8 |
7.0 / 6.7 |
4.1 / 4.3 |
| Kuala Lumpur Kepong |
KLK MK |
Hold |
21.40 |
22.25 |
5,049 |
15.9 / 16.7 |
51.3 / 49.4 |
1.5 / 1.4 |
9.8 / 8.8 |
8.9 / 9.1 |
3.8 / 3.6 |
| SD Guthrie |
SDG MK |
Add |
4.75 |
5.20 |
7,591 |
20.4 / 23.4 |
22.6 / 20.4 |
1.6 / 1.6 |
8.0 / 7.0 |
9.6 / 10.1 |
2.9 / 2.6 |
ESG: Sustainability, Labour Practices, and Global Recognition
Wilmar has attained notable ESG milestones, recognized as a member of the FTSE4Good Developed Index, FTSE4Good ASEAN 5 Index, and Dow Jones Sustainability Indices (Asia Pacific). Its ESG ratings include:
LSEG ESG Combined Score: B-
FTSE Russell ESG rating: 3.8
MSCI ESG rating: A
S&P Global ESG score: 75
“High Risk” under Sustainalytics (noting areas for improvement)
Wilmar led the SPOTT (Sustainability Policy Transparency Toolkit) global ranking for the second consecutive year in 2022, scoring 93.2%.
US Customs and Border Protection’s modification of forced labor findings against Sime Darby Plantation and FGV in Malaysia has eased sector concerns. Wilmar manages 59,700ha of planted oil palm in Malaysia (26% of its total). The group enforces strict recruitment and labor policies, directly recruits and pays workers, and avoids third-party recruitment fee risk.
Highlights:
Debuted on Dow Jones Sustainability Index Asia Pacific in 2020.
Upgraded to A by MSCI in Jan 2022.
Retained FTSE4Good rating (3.8/5) in Aug 2022.
Ranked #1 globally in SPOTT by Zoological Society of London in 2022.
Top performer for protecting children’s rights in Global Child Forum’s 2022 benchmark.
Target to reduce GHG emissions intensity in all palm oil mills by 15% versus 2016 baseline (0.82 tCO2e).
Wilmar’s Balance Sheet and Cash Flow Overview
Total Cash and Equivalents (2025F): US$7.55 billion
Total Debt (2025F): Short-term US$21.72 billion; Long-term US$6.63 billion
Shareholders’ Equity (2025F): US$20.45 billion
Net Gearing: Trending down from 100% (2023A) to 85% (2027F)
Capex (2025F): US$1.5 billion
Free Cashflow to Equity (2025F): US$1.22 billion
Key Financial Ratios (2025F):
Revenue Growth: 9.78%
Operating EBITDA Margin: 5.49%
Effective Tax Rate: 25%
Accounts Receivables Days: 35.23
Inventory Days: 69.54
Accounts Payables Days: 19.43
Conclusion: Navigating Uncertainty with Resilience and Strong Fundamentals
Wilmar International enters the remainder of 2025 with solid fundamentals and a resilient business model, though global volatility, regulatory risks, and shifting consumer trends pose challenges. Its robust performance in soybean crushing and consumer products, combined with its leading ESG credentials and peer-beating scale, sets a foundation for long-term value creation. Investors are advised to maintain a neutral stance amid ongoing uncertainties, monitoring developments in Indonesia, global trade policies, and commodity price trends closely.
