Wilmar International has reported a significant 30% quarter-on-quarter decline in its core net profit for the second quarter of 2025, amounting to $241 million. This performance, although within CGS International’s expectations, fell short of Bloomberg’s consensus estimates. The decline was largely attributed to compressed margins in the Feed & Industrial Products segment, particularly affecting palm oil processing.
The agribusiness giant’s first half of 2025 saw a core net profit of $584 million, marking a 4% year-on-year decrease. The company’s Food Products segment experienced softer sales volumes, whilst the Feed & Industrial Products segment suffered from weak palm processing margins. Despite these challenges, the Food Products segment’s profit before tax improved year-on-year due to better sales volumes and improved margins.
Looking ahead to the second half of 2025, Wilmar anticipates continued challenges in the Tropical Oils sub-segment due to difficult palm oil refining conditions in Indonesia. However, the company expects some relief from improved soybean crushing in China, driven by increased demand. The Plantation and Sugar Milling segment is also projected to benefit from higher commodity prices.
Despite these potential upsides, Wilmar remains cautious due to ongoing uncertainties in Indonesia, including land confiscation issues and investigations into alleged corruption related to palm oil export permits and rice mislabelling. CGS International has reiterated its “Reduce” rating for Wilmar, citing these risks alongside potential de-rating catalysts such as unfavourable court rulings and lower-than-expected crushing margins. Conversely, stronger-than-expected consumption in China could provide an upside to the company’s profitability.
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