2015 was a year in which the global economy faced several challenges – macro‑economic uncertainty, geo‑political tensions, continuing volatility and decline in oil and commodity prices. The global economy is expected to grow at a slow pace in 2016 and, as markets react to this slowing growth, we can expect continued unpredictability.
Olam’s FY15 results have been achieved under difficult market conditions. I continue to remain optimistic about the long‑term prospects of the agri‑commodity industry and the opportunities it presents for us. We remain focused on our strategy and on investments which we believe will shape the future of our Company.
Gratitude to our retired Chairman
FY15 was a year of change and transition for the Olam Board. On 31 October 2015, R. Jayachandran retired as Chairman and Director of Olam after a decade. Jaya has guided Olam with true stewardship and a great degree of farsightedness. His strong leadership has helped make Olam what it is today. On behalf of the Board and the Management Team, I would like to thank Jaya for his invaluable guidance, motivation and encouragement.
Continued strong performance
The fiscal year of the Company was changed from June to December to align with the Group consolidation and reporting requirements of our majority shareholder, Temasek Holdings. With this change, FY15 covers an 18‑month period from July 2014 to December ?2015. Sales revenue for this period was $28.2 billion, while Profit After Tax and Minority Interest was $98.7 million for the same period. The underlying performance in a majority of our platforms was strong. We also refreshed our six‑year strategy (2016 to 2021). The strategy continues to remain focused on our dual objectives of delivering profits and positive free cash flow simultaneously, and has resulted in the identification of the main platforms in which we will invest to grow, as well as the key drivers for execution of this strategy.
Changes to shareholdings
During the year, Mitsubishi Corporation became the Company’s second largest shareholder with a 20% stake, pursuant to signing a subscription agreement with the Company and acquiring 222 million secondary shares from the Kewalram Chanrai Group. Mitsubishi is a strategic investor and aligned to our long‑term growth strategy. We are confident that with long‑term shareholders like Temasek and Mitsubishi, we are better placed to pursue selective value‑accretive investment opportunities that are presented by the current macro‑economic uncertainty and depressed commodity market conditions. I ?am pleased to welcome onto the Board Katsuhiro Ito and Yutaka Kyoya from Mitsubishi Corporation, who both joined in November 2015 (click here to read more information about the Board).
I would like to thank our shareholders for their continued support and confidence. The Board of Directors is pleased to recommend a second and final dividend of 3.5 cents per share, subject to the approval of our shareholders. This, when added to the interim dividend of 2.5 cents per share, makes the total dividend for the year 6 cents per share. The total dividend declared for FY15 is therefore $158.1 million.
Focus on good governance
A more detailed review of the results for the year and the operating performance of the Group is contained in the Co‑Founder and Group CEO’s review, and the Group COO’s financial and operating review.
The Board continues to focus on effective Corporate Governance and is committed to maintaining high standards in the governance process, as a part of our accountability to all our stakeholders. We focus on people, strategy, risk, audit, compliance, and, above all, sustainability. There is a free and frank exchange of thoughts and ideas with the Management Team to address a complex array of business issues.
In keeping with our stated objective of an ongoing renewal of the Board, Mark Haynes Daniell and Wong Heng Tew stepped down from the Board at the end of the FY14 Annual General Meeting. In December 2015, N. G. Chanrai also retired from the Board. I would like to thank N.G., Mark and Heng Tew for their contributions to the Board. I am delighted to welcome Yap Chee Keong and Marie Elaine Teo who have joined as Independent and Non‑Executive Directors from December 2015. I would also like to record my appreciation to my fellow Directors for their contributions over the past year.
On behalf of the Board, I would like to thank our global team of 62,500 ‘Olamites’ for their discretionary effort and displaying the extraordinary commitment which has helped the Company deliver good results in difficult market conditions.
I will close by expressing my sincere gratitude to our shareholders, investors, business partners and all other stakeholders for their unstinting support.
Kwa Chong Seng
Non-Executive Chairman, and Independent Director