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Value chain review – Mid/Downstream

The Mid/Downstream segment had a healthy volume growth of 18.6% in 2017. The growth in volumes was mainly coming from the Grains and Animal Feed platform, the Peanut business in the USA and cashew processing operations in Vietnam. Wheat milling capacity in Nigeria and Ghana increased during the year which led to higher milling volumes. The Animal Feed business in Nigeria also started contributing in 2017. Peanut volumes in the USA were higher on full-year consolidation of volumes from Brooks Peanut Company.

Despite larger sales volumes, revenues were flat due to lower prices across most products, including cocoa, tomatoes, dehydrates and sugar.

EBITDA was higher by 11.1% in 2017 compared with 2016. This was primarily on account of the improvement in wheat milling in West Africa, full-year consolidation of results from Brooks and strong contribution from GSEZ after its commissioning of new ports and partial sale of port concession rights. These improvements were offset by lower results from tomato processing and the Packaged Foods Business in Nigeria.

Invested capital was lower by S$233.9 million in 2017, largely arising from the reduction in working capital. This was due to optimisation initiatives for cocoa as well as the lower prices of tomatoes and dehydrates.

The increase in EBITDA on lower invested capital lifted EBITDA/IC from 9.7% in 2016 to 11.1% in 2017.