Wilmar International

[greengiraffe]

Baking, grocery markets challenging: Goodman Fielder
AAP NOVEMBER 20, 2014 10:52AM

Goodman Fielder chief Chris Delaney says market conditions remain competitive. Source: News Corp Australia
AUSTRALIA’S biggest food producer Goodman Fielder says market conditions remain competitive.

In slides accompanying his address to shareholders at the company’s annual general meeting, Goodman Fielder (GFF) chief executive Chris Delaney said the baking and grocery markets in Australia and New Zealand remained challenging.

Goodman Fielder was also carefully assessing the introduction of discounted private label bread into Australia and New Zealand.

Mr Delaney said lower farmgate milk prices were expected to boost its New Zealand dairy business.

And new products in core categories such as spreads, baking mixes, flour and baking would help drive growth.

Goodman Fielder will seek to improve its competitive position by engaging with major customers on the key issues of improving daily fresh deliveries, new product development and consumer insights.

Chairman Steven Gregg said the company expects to hold a shareholder meeting in the first quarter of 2015 to consider Singaporean agribusiness Wilmar and Hong-Kong investment firm First Pacific’s $1.4 billion takeover offer.

The Goodman Fielder board has recommended the offer be accepted. The proposal still requires some regulatory approvals.

“In relation to the growth prospects of the company and opportunities for our staff, customers and consumers, the board believes the transaction will allow Goodman Fielder to further leverage our strong consumer food brands in Australia and New Zealand to grow our business across the Asian region,” Mr Gregg told shareholders.

“Wilmar and First Pacific are financially strong businesses which are complementary to Goodman Fielder’s existing operations.”

Shares in Goodman were steady at 65 cents at 11.08am (AEDT).


AAP

[greengiraffe]

Baking, grocery markets challenging: Goodman Fielder
AAP NOVEMBER 20, 2014 3:05PM

Goodman Fielder chief Chris Delaney says market conditions remain competitive. Source: News Corp Australia

AUSTRALIA’S biggest food producer Goodman Fielder is working on a range of new products to drive its earnings higher, amid fierce competition from rivals.

Chief executive Chris Delaney says the maker of Helga’s bread and White Wings is increasing how much it spends on developing new products and marketing to help boost earnings.

He told shareholders at the company’s annual meeting that there were plans to launch new spreads, baking mixes and flour products.

An insufficient range of new products in the spreads category hurt Goodman’s grocery earnings in Australia last financial year.

Goodman’s (GFF) new products are being developed against a background of increased competition in the baking and grocery markets in Australia and New Zealand.

Supermarket giants Coles and Woolworths have stepped up competition in the bread market by selling their own brand loaves for $1 or less, a steep discount to Helga’s, which is priced around $5 a loaf.

The introduction of $1 loaves in 2011 was a blow for Goodman Fielder — which also owns the Wonder White, Country Life and Mighty Soft bread brands — hurting its revenue and earnings.

Mr Delaney said Goodman was carefully assessing those discounts.

Meanwhile, lower farmgate milk prices are expected to boost Goodman Fielder’s New Zealand dairy business.

In the 2013/14 financial year, the farmgate milk price in New Zealand rose 57 per cent, a rise that Goodman Fielder was unable to fully recover through increased prices to retailers.

Goodman Fielder suffered a net loss of $405.1 million in 2013/14 on the back of rising costs and price competition.

Meanwhile, shareholders will be able to vote in early 2015 on a $1.4 billion takeover offer for Goodman from Singaporean agribusiness Wilmar and Hong-Kong investment firm First Pacific.

The Goodman Fielder board has recommended the offer be accepted, but it still requires some regulatory approvals.

Shares in Goodman Fielder were steady at 65 cents at 2.32pm (AEDT).


AAP

[greengiraffe]

Note: Based on the Liem Sioe Liong's Salim Group Book, Wilmar Kuok and Salim Linked First Pacific's relationship dated all the way back to the 70/80s... This is a must read book for anyone who is interested in Indonesians, Malaysians and their impact on Singapore and SE Asian financial systems. After you read the book, you will be very confident that you will buy very little of Indonesian and Malaysian linked shares.

Whatever acquisitions that these companies made are strategic. However, it is highly unlikely that there will be much benefits for minorities.

GG

Goodman Fielder investors question Wilmar takeover
THE AUSTRALIAN NOVEMBER 21, 2014 12:00AM

Eli Greenblat

Senior Business Reporter
Melbourne
Share price chart for Goodman Fielder
Share price chart for Goodman Fielder Source: TheAustralian

SHAREHOLDERS in Australia’s leading listed food company, Goodman Fielder, have questioned the board’s backing of a $1.3 billion takeover by Singaporean oils group Wilmar International and Hong Kong investor First Pacific, just as the region is opening up to local produce thanks to the landmark free trade agreement with Asian economic giant China.

Facing criticism from retail investors who turned up to what could be 100-year-old Goodman Fielder’s final shareholders’ meeting as a public company, chief executive Chris Delaney warned that the future wasn’t bright even if the company decided to remain independent as market conditions were tough.

Chairman Steven Gregg said 2014-15 was consistent with last year’s conditions, characterised by weak consumer sentiment and heightened competition that put pressure on pricing and volume in some of the company’s key categories.

He was backed by Goodman Fielder director Ian Johnston, the former boss of brewer Foster’s, who in his re-election pitch to shareholders said the competitive landscape was difficult because of the relationship with the major supermarkets, through which the group sold its produce.

The baking and grocery markets in Australia and New Zealand, where Goodman Fielder has a huge portfolio of branded products, were being challenged by the onslaught of private label competition. The company’s popular bread range, including Helga’s and Mighty Soft, had been hit by recent offers of 85c bread from the supermarkets.

Retail shareholders still voiced their concern, however, lamenting the loss of a historic Australian company into overseas hands, at a time when demand from Asia for baking and dairy foods was a huge opportunity for Goodman Fielder.

In the wings are Wilmar and First Pacific, which are now awaiting regulatory approval from New Zealand and China’s Ministry of Commerce to push ahead with their offer of 67.5c a share, a takeover that values the group at $1.3bn.

As shareholders prepare to receive an independent experts’ report, regulatory approval from China has been delayed for several months, raising concerns the nation could block the deal altogether.

Wilmar and First Pacific require approval from China’s Ministry of Commerce because both companies operate sizeable businesses in China.

The takeover, conducted via a scheme of arrangement and supported by the Goodman Fielder board nearly six months ago, has been approved by the Foreign Investment Review Board, the Australian Competition and Consumer Commission and NZ’s Commerce Commission.

[specuvestor]

That's the way of the tycoons. You ride with them, you dont get in their way unless you are not OPMI

No difference with Thai or Singapore tycoons, even Thaksin or Wee. They don't build their empire thinking of shareholders' interest first. Only difference is the degree.

[Temperament]

That's the way of the tycoons. You ride with them, you dont get in their way unless you are not OPMI

No difference with Thai or Singapore tycoons, even Thaksin or Wee. They don't build their empire thinking of shareholders' interest first. Only difference is the degree.

i think it's a fair statement to think of yourself first before anyone. The very obvious is if you can't take care of your home & family, how can you take care of your kins and friends?
When i invest, i must think what this investment going to do to me first before anyone or anything. It's the natural law of order ma.
No?

[zerobeta]

What is the merit of this investment? What makes this highly-covered company worth our money? They are essentially a price taker in a crowded commodity market with very thin operating margin of around 3%. The oil-seeds business is sometimes loss-making. Debt to equity is over 100% with almost 40% of their recurring profits go to financing costs annually. Although highly leveraged, ROE is only ~7% and ROIC ~3%. There is too much inorganic growth with 4 joint ventures in 2013 only and 23 acquisitions over the past 4 years, yet ROA has been dropping every year since then. Dividend yield is only around 2%.

Valuation is also an issue. How do you guys value this company? DCF? DDM? Peer multiples? Peer multiples may be too simplistic. DDM may not be accurate due to inconsistent dividends. DCF is the most accurate but forecasting is a problem as their businesses are very complex and highly dependent on a lot of uncertainties and drivers (mother nature, currencies, commodities price, commodities supply and demand, etc.).

Is there something I miss?

[mrEngineer]

My main merits are qualitative than quantitative. Wilmar has the largest market share in China for cooking oil (44%) and also has largest market share in soybean crushing in China (25%).

[corydorus]

I have been following this counter for some time but did not proceed with it as i did not spend much time on it as commodities on the whole has been challenging. I think is strong point to have large market share especially in China. My question will be do Wilmar has influence on the product pricing to profit from it. Is there technological advances that they are working on to reduce their cost structure as an edge to benefit from maintaining the same price being the market leader or is just mindless expansion with lowest cost ? Do we see structural or policy changes in China that impact it.

[valuebuddies]

Result is out:

http://infopub.sgx.com/FileOpen/Wilmar%2...eID=334724

Not bad in my opinion, the most exciting part to me being an investor is the improved gross margin of 9.95% versus 8% plus for the previous quarters.

Palm and Laurics
Profit before tax for 4Q2014 increased 8.8% to US$218.3 million, underlining the strong margin expansion registered by Palm and Laurics during the quarter. This was mainly due to a combination of lower feedstock costs and stable growth in the Group’s downstream Palm and Laurics businesses.

Oilseeds and Grains
Crushing margins remained positive during the quarter, resulting in a profit before tax of US$39.4 million. However, the profit was lower than in 4Q2013 (US$115.6 million), when delayed soybean shipments in the local market resulted in exceptional margins.

Consumer Products
The segment also registered margin expansion during 4Q2014, as profit before tax rose 4.7% to US$78.2 million (4Q2013: US$74.7 million). On a full year basis, profit before tax was up 19.3% to US$261.8 million for FY2014.

Plantations and Palm Oil Mills
Profit before tax for this segment, primarily generated by CPO and palm kernel produced from the Group’s own fruits, dropped 11.2% to US$77.2 million in 4Q2014 on lower sales volume and prices, but surged 41.3% to US$381.1 million in FY2014 due to higher production yield, depreciation in regional currencies and lower manuring cost.

Sugar
Milling recorded a profit before tax of US$21.3 million in 4Q2014 as compared to losses before tax of US$1.1 million in 4Q2013. The extended crushing season in Australia, due to the higher rainfall in early 3Q2014, resulted in more sugar being harvested in 4Q2014.

Should be positive to the share price ..

[btig]

CNY is coming.

More will be using cooking oil, flour, sugar, soya bean, rice, canola oil, olive oil, wholemeal bread. Did I missed anything?