Olam Group reports 9.2% EBIT growth in 2024, driven by strong performance in ofi, Olam Agri
SINGAPORE – Olam Group, a leading global food and agribusiness, has announced a 9.2% year-on-year (YoY) growth in Group operating profit (EBIT) for 2024, reaching S$1.9 billion (US$1.41 billion).
According to the company, the growth was primarily driven by robust performance in its food ingredients business, ofi, and its agribusiness unit, Olam Agri.
ofi, Olam’s food ingredients business, recorded a 29.1% year-on-year increase in EBIT to S$1.07 billion (US$795 million). This growth was largely attributed to a 41.8% surge in the Ingredients & Solutions segment, which capitalized on higher value-added offerings and strong customer demand.
Revenue for ofi rose by 40.1% to S$21.8 billion (US$16.2B), highlighting the effectiveness of its integrated supply chain and market-driven strategy.
“Despite significant market turbulence, we leveraged our scale, diversification, and deep market insights to maintain a steady supply of high-quality ingredients. Our focus remains on optimizing risk-adjusted returns while delivering value to our customers,” stated A. Shekhar, CEO of ofi,
Olam Agri, which focuses on grains, oilseeds, and agricultural commodities, posted a 5.8% year-on-year EBIT growth to S$1.02 billion (US$758 million). Revenue increased by 5.9% to S$33.2 billion (US$ 24.6B), with the Fibre, Agri-Industrials & Ag Services segment leading growth at 32.2% year-on-year.
Sunny Verghese, CEO of Olam Agri and Co-Founder of Olam Group, remarked, “Olam Agri sustained its growth momentum despite headwinds such as high interest rates, currency volatility, and economic slowdowns in key markets. Our continued focus on sustainable sourcing and meeting the rising demand for food and feed remains a priority.”
Strategic transactions
Olam Group has also made significant strides in its re-organization efforts. The company announced the sale of a 44.58% stake in Olam Agri to the Saudi Agricultural and Livestock Investment Company (SALIC) for approximately US$1.78 billion, valuing Olam Agri at US$4.00 billion. Additionally, the remaining 19.99% stake will be sold to SALIC after three years at a predetermined valuation with a 6% internal rate of return (IRR).
“We are pleased to achieve this milestone in our re-organization plan. This landmark deal unlocks substantial value for our shareholders, strengthens our capital structure, and positions Olam Agri for future growth,” Verghese added.
The Group will now focus on exploring strategic options to unlock further value, including a potential IPO for ofi.
In the second half of 2024, Olam Group’s revenue grew by 24.0% to S$29.2 billion, with EBIT increasing by 10.0% to S$1.05 billion (US$1.1B).
However, Profit After Tax and Minority Interest (PATMI) for the full year declined by 69.0% to S$86.4 million (US$64.1 million) due to increased finance costs and exceptional losses from operational disruptions.
Operational PATMI stood at S$216.3 million (US$160M), down 52.8% year-on-year, while free cash flow to equity (FCFE) fell to negative S$5.9 billion (US$4.4B), mainly due to higher cocoa and coffee prices and elevated interest rates. Net gearing rose to 2.79 times from 1.73 times in 2023, reflecting increased working capital investments.
The Board of Directors has recommended a final dividend of 3.0 cents per share, bringing the total dividend for 2024 to 6.0 cents per share, compared to 7.0 cents in 2023.
Outlook for 2025
Looking ahead, Olam Group expects continued macroeconomic and geopolitical uncertainties in 2025, including trade tensions between the U.S. and China, inflationary pressures, and conflicts in key regions. Despite these challenges, ofi and Olam Agri remain well-positioned to navigate market dynamics and sustain profitability.
ofi anticipates near-term volatility in raw materials such as cocoa and coffee but remains committed to its medium-term goal of high single-digit EBIT growth. Olam Agri will continue its expansion across food, feed, and fibre segments, leveraging SALIC’s strategic partnership for growth.
Meanwhile, the Remaining Olam Group will focus on reducing losses while evaluating strategic options to maximize shareholder value.
Sign up to HERE receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.
