Wilmar: (The Edge) On track to build sugar business and expects better 4Q on higher margins.
Note that a successful acquisition of Prosperine Sugar Mill would increase Wilmar’s market share in Australia’s sugar-cane processing to nearly 50%, although the loss making Properperine is not expected to have a significant impact on Wilmar’s earnings in the near term. By 3Q12, Sugar Business contributed abt 12.6% to Wilmar’s pre-tax profit.

Grp’s CPO business prospect are also beginning to look brighter, with the Indo govt reducing its export tax of processed palm products (9% lower then CPO), as such, Wilmar’s refining margins are expected to rise in 4Q due to the wider export-tax differentials, while Co has also benefited from better margins for its consumer products business in China after the Co. recently raised the prices of its cooking oils when price restrictions in China was relaxed.

JP Morgan expects Wilmar to report better numbers in 4Q as margins for consumer products continue to recover and margins for its palm and lauric business in Indo benefits from the revisions to export taxes. Overall forecasts a 17% increase in earnings for 4Q11.