Olam Group's first-half profit falls 89% on poor almond crop yield

(Reuters) -Singapore's Olam Group posted an 88.8% fall in first-half profit on Friday, hurt by a lower crop yield from its almond orchards in Australia and higher borrowing costs.

Earnings before interest and tax (EBIT) for the company's food ingredients segment, that trades cocoa, coffee, nuts, dairy and spices, rose 3.4%.

Last month, Olam flagged lower bee activity during pollination, adverse weather impacts, including unseasonal cold amid excessive rain and flooding, led to an unexpected drop in yield and quality of the 2023 almond crop in Australia.

"We have been budgeting for higher interest costs and optimising cost structures overall. We are however not immune to near-term impact from rapid benchmark interest rate hikes affecting companies globally," CFO N Muthukumar said.

Olam, one of the world's biggest agricultural commodity traders, reported a profit attributable of S$48 million ($35.6 million) for the six months ended June 30, compared with S$429.1 million a year earlier.

The company's Agri unit, that trades grains and animal feed, edible oils, rice and cotton, posted an EBIT about 9% less than last year.

Olam Group declared an interim dividend of 3 Singapore cents, compared with 4 Singapore cents a year earlier. ($1 = 1.3490 Singapore dollars)

(Reporting by Echha Jain in Bengaluru; Editing by Shinjini Ganguli and Shounak Dasgupta)