Food Staples and Packaged Foods
The Food Staples and Packaged Foods segment delivered volume growth of 78.1% in 2017.
This growth was led by a significant increase in trading volumes for Grains and also supported by an increase in Edible Oils, Rice and Dairy trading volumes. Driven by the higher volumes, revenues increased by 59.8% during the period.
EBITDA grew 8.9% in 2017 as compared with 2016. The Grains and Animal Feed platform benefited from the increase in wheat milling volumes and margins in West Africa, and the commencement of the animal feed business in Nigeria. This was partially offset by the lower contribution from the trading business which faced strong headwinds especially in the last quarter of 2017. The Rice origination, distribution and trading business continued to perform well and farming operations in Nigeria turned positive. Dairy supply chain continued to perform well while upstream farming operating results in Russia and Uruguay recorded a strong improvement. In Edible Oils, while the refining business did better this year, overall EBITDA came down due to lower trading margins. The contribution from Sugar trading was also lower. Notwithstanding the stabilisation of the Naira, the Packaged Foods business did not see a commensurate pick-up in margins.
Compared with 2016, overall invested capital went up by S$156.2 million owing to the growth in fixed capital. Fixed capital increased due to the construction of animal feed mills and hatchery in Nigeria, expansion of wheat milling capacity in Ghana and Nigeria, and continued investments in palm plantations and milling in Gabon. Working capital was reduced due to the optimisation initiatives undertaken and lower commodity prices. Given the increase in invested capital, EBITDA/IC for the segment came down from 8.5% in 2016 to 7.8% in 2017.