Wilmar’s 5-Cent Interim Dividend Rises, but Cash Flow Lags Spending

Wilmar International (SGX: F34) raised its interim dividend for the six months ended 30 June 2026 to 5 Singapore cents per share, from 4 cents a year earlier. That is a 25% increase. For shareholders assessing the next payout, the question is whether cash generation improved alongside it. [S1, p. 27]

The August 2026 announcement gives a mixed answer. Wilmar reported higher earnings, but operating cash flow fell sharply and was below capital expenditure. Its interim results were unaudited. [S1, p. 3] [S1, p. 11] [S1, p. 28] [S1, p. 32]

What improved in earnings?

Profit attributable to Wilmar’s owners rose to US$608.9 million from US$594.9 million in the first half of 2025. Wilmar’s core net profit measure rose faster, to US$641.5 million from US$583.7 million. The distinction matters: the core figure is the company’s adjusted measure, rather than cash available for dividends. [S1, p. 3] [S1, p. 4]

Feed and Industrial Products delivered a stronger pre-tax result, helped by tropical oils and oilseeds. Food Products also improved, but its comparison benefited from the consolidation of AWL Agri Business Limited since December 2025 and a gain on disposing of joint ventures in China. Investors should therefore be careful about treating all of the reported earnings growth as a repeatable rise in the existing businesses’ profits. [S1, p. 28] [S1, p. 30] [S1, p. 31]

Why cash tells a different story

Wilmar generated US$521.9 million of net cash from operating activities in 1H2026, down from US$1.76 billion a year earlier. Cash generated before working-capital changes actually increased, but inventories absorbed cash during the period. Interest and tax payments also sit between that earlier cash-flow measure and the final operating cash-flow figure. [S1, p. 11]

Capital expenditure, including advances paid, was US$678.8 million. It exceeded operating cash flow by about US$156.9 million before acquisitions or distributions. The group also reported US$95.4 million used for acquisitions of subsidiaries, joint ventures and associates. Those figures make the higher dividend a more demanding cash commitment if the first-half pattern persists. [S1, p. 32]

The cash-flow statement records US$491.6 million of dividends paid by Wilmar and US$42.6 million paid to non-controlling shareholders of subsidiaries during the half. These were cash outflows in the period; they should not be confused with the new 5-cent interim dividend announced in August. The filing estimated that interim dividend at US$243.6 million, based on shares outstanding at 31 July. [S1, p. 12] [S1, p. 27]

Debt and the next dividend question

Wilmar reported net loans and borrowings of US$20.67 billion at 30 June 2026, up as higher soybean and palm commodity prices increased funding needs. Its net gearing ratio edged up to 0.93 times from 0.91 times at December 2025. Wilmar’s adjusted ratio, which accounts for liquid working capital, was broadly steady at 0.33 times. That context matters for a business financing substantial inventories, although it does not remove the need for cash to fund distributions and investment. [S1, p. 32] [S3, p. 15]

The 5-cent interim dividend was a real increase, but the first-half filing does not yet make a convincing case for a stronger ongoing dividend outlook. The next results should show whether operating cash flow recovers as working capital moves, and whether it can cover investment without a further rise in debt. The filing scheduled the interim payment for 2 September 2026; that date is a historical timetable, not evidence here that payment was completed. [S1, p. 11] [S1, p. 32] [S1, p. 34]