Falling crude palm oil prices widen Golden Agri's losses

Dry weather in Indonesia resulted in only a marginal increase in output last year, while crude palm oil prices fell from US$768 per tonne to US$574 per tonne. Lower average prices led to the firm's revenue falling 15 per cent to US$1.55 billion from
Dry weather in Indonesia resulted in only a marginal increase in output last year, while crude palm oil prices fell from US$768 per tonne to US$574 per tonne. Lower average prices led to the firm's revenue falling 15 per cent to US$1.55 billion from a year ago.PHOTO: BLOOMBERG

Q4 net loss swells to US$88.4m owing to higher fair-value loss on biological assets

Golden Agri-Resources' net losses widened sharply in the fourth quarter from a year ago owing to a higher fair-value loss on its biological assets of US$197.7 million (S$278 million).

Net losses swelled to US$88.4 million in the three months to Dec 31, from US$22 million a year earlier as declining crude palm oil prices hit the value of its biological assets.

For the full year, the firm swung to net losses of US$16.7 million from net profit of US$113.6 million.

Loss per share grew to 0.69 US cent from 0.17 US cent, while net asset value was 68 US cents as at Dec 31, unchanged from a year earlier.

Revenue fell 15 per cent to US$1.55 billion from US$1.82 billion a year ago, due to lower average crude palm oil prices last year.

Dry weather in Indonesia resulted in only a marginal increase in output last year, while crude palm oil (CPO) prices fell to US$574 per tonne from US$768 per tonne.

  • AT A GLANCE

  • REVENUE: US$1.55 billion (-15 per cent)

  • NET LOSS: US$88.4 million

  • TOTAL DIVIDENDS: 0.502 Singapore cent per share (-14.2 per cent)

That sent revenue from plantation and palm oil mills down 22 per cent to US$1.5 billion.

Net foreign exchange losses for the year swelled to US$91.8 million from US$13.8 million a year earlier due to a weaker Indonesian rupiah against the US dollar.

The firm also took a fair-value loss on forward foreign currency contracts to hedge its exposure to the rupiah and the Malaysian ringgit, which weakened sharply against the greenback last year.

Mr Franky Widjaja, its chairman and chief executive, said: "2015 was a tough year both for the palm oil industry and Golden Agri-Resources."

"The group's operating performance will be affected by the prices of CPO and competing seed oils, climatic conditions and fluctuating foreign currency exchange rates.

"The occurrence of El Nino in 2015 is expected to lower our production in 2016, but the impact will be mitigated by expected higher CPO prices, resulting from supply shortage and increased domestic demand from the implementation of the biodiesel policy in Indonesia," he added.

The company's total dividends were 0.502 Singapore cent per share, down from 0.585 cent a year earlier.

Shares of Golden Agri-Resources fell 1.3 per cent or 0.5 cent to 37 cents, with 38.8 million shares traded.

A version of this article appeared in the print edition of The Straits Times on March 01, 2016, with the headline 'Falling crude palm oil prices widen Golden Agri's losses'. Print Edition | Subscribe