Olam Group Reports 488.7% Year-on-Year Surge in H1 2026 PATMI
Olam Group Limited reported a significant increase in profit after tax and minority interest (PATMI) for the first half of 2026, supported primarily by substantial one-off gains from the Group’s strategic divestment programme. PATMI rose 488.7% year-on-year to S$1.9 billion, while the Group also strengthened its balance sheet and significantly reduced net gearing.
The results mark an important milestone in Olam Group’s transformation into a more focused and financially resilient organisation. The Group continued to execute its divestment strategy while maintaining operational resilience across its continuing businesses.
The sharp increase in PATMI was largely attributable to a total one-off gain of S$1.75 billion. This comprised gains from the disposal of a 44.58% stake in Olam Agri under the first tranche of the transaction, known as “Tranche 1,” as well as the disposal of Olam Group’s entire 100% interest in Mindsprint. The Group also recognised a fair value gain arising from the valuation of the put and call option relating to its remaining stake in Olam Agri.
Despite the significant contribution from these non-recurring items, the underlying performance of the continuing business also improved. After adjusting for the S$1.75 billion one-off gain and non-cash foreign exchange gains recorded in the first half of 2025, Operational PATMI from continuing operations increased by S$84.7 million year-on-year to S$64.4 million.
Revenue and EBIT Reflect Lower Commodity Prices
Olam Group’s revenue declined 18.3% year-on-year to S$12.5 billion during H1 2026. The decline was primarily driven by lower input prices in ofi, particularly in the cocoa and coffee businesses. Lower volumes reported by Olam Global Holdings (OGH) also contributed to the reduction in Group revenue.
EBIT decreased 34.2% year-on-year to S$455.0 million. However, the reported decline was affected by significant non-cash foreign exchange revaluation gains recorded in H1 2025. Those gains amounted to US$142 million, equivalent to approximately S$187.4 million.
Excluding the impact of these foreign exchange gains, H1 2026 EBIT was approximately 10% lower than the corresponding period in 2025. This provides a clearer view of the Group’s underlying operating performance amid challenging commodity markets and broader economic uncertainty.
Stronger Cash Flow and Lower Leverage
A major feature of Olam Group’s H1 2026 performance was the substantial improvement in cash generation and balance-sheet strength. Free Cash Flow to Equity (FCFE) turned positive at S$1.7 billion, compared with negative S$945.3 million in H1 2025.
The improvement was driven by substantially lower working capital deployment as well as cash proceeds generated from the Group’s divestment activities. The stronger cash position allowed Olam Group to accelerate debt reduction and improve its financial flexibility.
Net gearing declined significantly to 0.93 times from 2.09 times at the end of H1 2025. The reduction was primarily attributable to deleveraging at OGH following the receipt of divestment proceeds, together with lower working capital-related debt at ofi.
The improvement in leverage provides the Group with a stronger financial foundation as it continues to invest selectively in growth opportunities while maintaining disciplined capital allocation.
Dividend Distribution
Olam Group’s Board of Directors has declared total dividends of 7.0 cents per share for shareholders. The distribution comprises an interim ordinary dividend of 1.0 cent per share and a special dividend of 6.0 cents per share.
The special dividend reflects the Group’s commitment to returning value to shareholders as it progresses with its divestment programme. Olam Group has stated that it intends to responsibly divest its remaining OGH businesses and assets over time and progressively distribute net proceeds from these transactions through special dividends, subject to operational and financing requirements.
Management Comments on H1 2026
Olam Group Executive Director and CEO of ofi, A. Shekhar, described the first half of 2026 as an important milestone in the Group’s transformation.
He highlighted the completion of the first tranche of the Olam Agri transaction as a major step that has strengthened Olam Group’s balance sheet, increased financial flexibility and demonstrated the Group’s ability to unlock value for shareholders.
At ofi, management said the business continued to demonstrate the resilience of its integrated operating model despite market volatility and geopolitical uncertainty. Lower capital deployment contributed to improved capital efficiency, stronger cash generation and higher net earnings.
Looking ahead, ofi intends to maintain a disciplined approach to capital allocation while selectively investing in opportunities that can support sustainable growth and long-term value creation.
Olam Group CFO Venkataraman Krishnan said the financial results reflected a less complex, more focused and financially stronger Group. He added that the organisation would continue concentrating on long-term growth and capital efficiency at ofi while progressing the divestment programme at OGH.
OGH CEO Gautam Wadhwa said the organisation’s Re-organisation Plan remains on track. Three businesses have already been sold or wound down, while the sale of OGH’s remaining stake in ARISE Ports & Logistics is progressing. OGH will continue working to responsibly divest and monetise its remaining assets while maintaining resilient operational performance.
Outlook for the Remainder of 2026
Olam Group expects the global economic environment to remain challenging during the remainder of 2026. Geopolitical developments, changing trade policies and uncertain macroeconomic conditions could influence consumer demand, international trade flows and global supply chains.
These factors may also contribute to higher inflation, elevated benchmark interest rates and slower global economic growth.
For ofi, volatility is expected to persist because of geopolitical developments, evolving trade policies, macroeconomic conditions and weather-related supply risks. The company plans to respond through disciplined capital allocation and active portfolio management.
As part of this strategy, ofi is evaluating the role of selected upstream agricultural assets, including its almond orchards and certain coffee, pepper and cocoa plantations. The review is aimed at improving capital efficiency, strengthening returns and increasing earnings resilience.
Despite near-term uncertainty, ofi continues to target low- to mid-single-digit volume growth and high-single-digit adjusted EBIT growth over the medium term.
Meanwhile, OGH expects its constituent businesses to deliver resilient operational performance throughout 2026. However, management continues to monitor potential risks arising from changes in the global environment, including the possible escalation of the Middle East conflict, which could adversely affect business performance.
Overall, Olam Group enters the second half of 2026 with a significantly stronger balance sheet, improved cash flow and a clearer strategic focus. The successful execution of the Olam Agri transaction, continued progress in OGH divestments and the Group’s commitment to disciplined capital allocation are expected to remain central to its efforts to create sustainable long-term value for shareholders.
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