Food Staples and Packaged Foods
Key highlights for the year
Food Staples and Packaged Foods segment volumes increased by 20.1% mainly due to higher volumes from Grains’ origination and export operations as well as the wheat milling operations post the acquisition of BUA Group’s wheat milling assets in Nigeria. The Rice, Sugar and Dairy businesses also recorded an increase in volumes as compared with the previous year.
Revenues grew by 13.3% in 2016 mainly due to volume growth and higher dairy, rice and sugar prices, part of which were offset by the adverse currency impact on Packaged Foods’ revenues.
The segment reported a robust 55.7% growth in EBITDA as all platforms recorded an improvement in EBITDA over the prior year. Operations which underperformed during the prior year showed strong improvements in 2016. The edible oil refining and distribution operations in Mozambique including those of Acacia performed better than in 2015. Rusmolco was profitable for the year while the dairy farming operation in Uruguay recorded significantly improved operating metrics and hence better results compared with 2015. Packaged Foods posted improved performance despite facing headwinds during the year from currency volatility as well as the disruption of dairy and beverage juices production in Nigeria after a plant fire in April 2016.
Overall invested capital increased by S$1.3 billion compared with 2015. Fixed capital went up mainly due to the acquisition of wheat milling assets and construction of animal feed mills in Nigeria, expansion of wheat milling capacity in Ghana, and continued investments in palm plantations in Gabon. Working capital also moved up with higher volumes in Grains and Sugar.
As a result of the strong performance in EBITDA, EBITDA/IC for the segment improved markedly from 6.7% in 2015 to 8.5% in 2016.