Edible Nuts, Spices and Vegetable Ingredients
Key highlights for the year
The Edible Nuts, Spices and Vegetable Ingredients segment had a marginal volume increase of 1.3% in 2016 as improved volumes from the Edible Nuts platform, particularly peanut volumes, which grew due to the consolidation of results of the acquisition in the USA, and cashew volumes, were offset by lower tomato paste volume. Segment revenues, however, fell by 5.8% mainly because of lower almond and tomato paste prices.
EBITDA declined by 15.7% in 2016 mainly due to a lower contribution from the almond and tomato processing businesses. All other businesses in the segment performed better than in 2015.
The almond business, which mainly comprises upstream operations, was impacted by overall lower prices in 2016. Almond prices, however, were higher in the second half of 2016 compared with those during the first half of the year.
The tomato processing business continued to experience margin pressures arising from weak demand, depressed market prices and higher raw material cost compared with 2015. The impact is expected to continue into the first half of 2017.
Compared with 2015, invested capital in the segment increased by S$179.7 million. The increase in fixed capital came from the acquisition of Brooks. Overall working capital increased slightly due to higher inventory in peanuts and tomatoes, offset by lower working capital in almonds due to lower prices. As a result, EBITDA to average invested capital (EBITDA/IC) for the segment declined from 11.5% in 2015 to 9.3% in 2016.