It’s one thing to diversify to hedge your risks, but another to specialise in the upstream portion of the supply chain. But this agri-food company is doing exactly that.

Olam Group has been through some tough times in the past few years. Even though revenue has steadily grown from 2021 to 2024, the company faced burgeoning debt and interest costs, and higher commodity prices. 

But its restructuring and turnaround, initiated in 2020, is starting to yield some encouraging results for the company.

Let’s dive deeper into the company to see what kind of value investors can expect.

Olam Group (Olam) is a food and agri-business company, supplying food, ingredients, feed and fibre. It is currently undergoing a restructuring plan to reorganise into three operating groups, which include ofi (Olam Food Ingredients), Olam Agri and Remaining Olam Group. Olam is divesting its Olam Agri and Remaining Olam segments to unlock cash and value, and invest them into its ofi segment. 

Ofi sells food products and ingredients, which include cocoa, coffee, dairy, nuts, and spices and is targeting the healthy food industry. Meanwhile, Olam Agri sells grains & oilseeds, pasta, rice, edible oils, feed, wood products, rubber, sugar, biofuel, and commodity financial services. Finally, Remaining Olam Group sells digital solutions for its palm oil and rubber businesses.

At this stage of Olam’s business, it’s not straightforward to analyse its financials. Firstly, it has already stated that it has full intentions to sell its Olam Agri and Remaining Olam Group segments. And it is also exploring a dual-listing of its ofi segment in Europe and Singapore. Secondly, Olam Agri will eventually be fully sold to SALIC in three years. 

But until those sales are complete, I will be using the consolidated figures released by the company. Revenue recovered by 19.3% to SG$67 billion in 2025 from SG$56 billion in 2024, boosted by higher cocoa and coffee selling prices in its ofi segment. Meanwhile, its earnings before interest (EBIT) grew by 13.2% to SG$2.1 billion, with the bulk of its contributed by ofi segment.

Olam as a whole has generated razor-thin margins in the past. It seeks to change that by focusing on ofi. The math is simple. In 2025, ofi generated an EBIT margin of 3.8% compared to 2.5% for Olam Agri. And prospects in the healthy food industry seem more secure, considering the shift of global consumers to that amid concerns of unhealthy processed foods. On that front, Olam is investing more into building a food ingredients and solutions platform that offers differentiated products that suit clients’ preferences.

It is also focused on reducing its debt - an issue that has plagued the company in the past. Long-term debt (which includes long-term loans and medium-term notes) has been halved from SG$12.1 billion in 2024 to SG$6.5 billion in 2025. It is also progressively divesting its ‘non-core assets’ now to reinvest those proceeds into its ofi segment. Olam is already divesting 64.57% of Olam Agri to SALIC in Tranche 1 for an estimated US$2.58 billion in gross cash proceeds. 

Analysts in the market are setting a target price of SG$1.60 with a potential upside of +26.0%.

Olam is currently trading at relatively cheap valuations. Price-to-book is trading at 0.75 times compared to the industry average of 0.90 times.

Source: Shareinvestor

Olam Group represents a turnaround at its halfway point, with a high potential upside. By divesting its non-core assets for investments into its ofi segment, it is putting its bets into the healthy food industry that is gaining popularity among consumers who are getting more health-conscious. 

Investors who are willing to take a long-term view on the company’s prospects could take a look at Olam.