Where next for Wilmar after declaring record dividend?

The group proposed a full-year dividend sum of S$0.195, after posting a 19% year-on-year net profit growth in FY2020.

  • Wilmar International (SGX: F34) shares opened lower on Tuesday, a day after reporting full-year financial results
  • The agribusiness group reported higher net and core net profits for FY2020
  • The board of directors also proposed a total dividend sum of S$0.195, the highest in the company’s history since its listing debut
  • Trade Wilmar stocks, long or short, with a live or demo IG account

Wilmar posts 19% increase in net profit

Wilmar International shares fell nearly 2% on Tuesday (23 February 2021), despite the group posting a 19% year-on-year improvement in net profit for the 2020 financial year.

Net profit increased to US$1.53 billion for the year ended 31 December 2020, versus FY2019’s US$1.29 billion, on the back of robust performance across all core segments.

Excluding gains from non-operating items and changes in fair value of biological assets, core net profit for FY2020 improved 18% year-on-year to US$1.49 billion from US$1.26 billion in FY2019.

Wilmar proposes highest dividend sum in its history

For the second half of the 2020 financial year, net profit increased 4% year-on-year to US$923.6 million, up from H2 2019’s US$885.5 million.

Core net profit for the same period increased 3% year-on-year to US$850.8 million, up from US$829.3 million.

Meanwhile, group revenue increased 24% year-on-year to US$27.87 billion in H2 2020 and 19% year-on-year to US$50.53 billion in FY2020. The higher revenues were achieved on the back of strong volume growth, firmer commodity prices as well as consolidation of Goodman Fielder’s results.

The board of directors has proposed a final tax exempt (one-tier) dividend of S$0.09 per share and a special dividend of S$0.065 per share.

Including the interim dividend of S$0.04 per share paid in August 2020, the total dividend paid and proposed for FY2020 is S$0.195.

This represents the highest cash dividend by the agribusiness group since listing in 2005.

What’s the outlook for 2021?

Looking ahead, Mr. Kuok Khoon Hong, Chairman and CEO of Wilmar, believes that demand for the company’s food products will ‘continue to be strong’.

‘We also expect the Feed & Industrial Products segment to remain satisfactory on the back of continued strong recovery of hog farming in China and positive manufacturing margins,’ he said in a press release, adding that the oil palm plantation and sugar milling segments will also benefit from higher palm oil and sugar prices.

Finally, Mr. Kuok noted the successful listing of Wilmar’s China subsidiary, Yihai Kerry Arawana (YKA) Holdings Co. Ltd on the Shenzhen Stock Exchange ChiNext Board in October 2020. The initial public offering generated positive cash inflow, bringing the group’s overall free cash flow to US$916.3 billion.

YKA was also included in the Shenzhen-Hong Kong Stock Connect (“SZHKSC”) with effect from 14 December 2020. With the inclusion, investors can now trade in YKA shares through Hong Kong brokers. YKA will also be added to the MSCI Global Standard Index as of the close of 26 February 2021.

Market capitalisation of YKA as at 29 January 2021 was RMB 661.00 billion, equivalent to approximately US$102.51 billion.

How to trade Wilmar shares with IG

Are you feeling bullish or bearish on Wilmar’s stocks?

Either way you can buy (long) or sell (short) the asset using derivatives like CFDs offered on IG's industry-leading trading platform, or by investing in the share directly, in a few easy steps:

  1. Create a live or demo IG Trading Account, or log in to your existing account
  2. Enter <Wilmar International> in the search bar and select the instrument
  3. Choose your position size
  4. Click on ‘buy’ or ‘sell’ in the deal ticket
  5. Confirm the trade

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