Golden Agri-Resources back in the black in Q1

SINGAPORE - Palm oil producer Golden Agri-Resources has posted a healthy first quarter net profit of US$94.1 million (S$128.8 million), reversing from a net loss of US$3.2 million a year earlier.

This was thanks to an increase in sales volume and margin improvement in downstream operations, which mitigated the impact of softer crude palm oil (CPO ) prices during the period, the company said on Friday (May 13).

Revenue for the three months to March 31 fell 3.8 per cent to US$1.49 billion.

Revenue from its plantation and palm oil mills segment fell 10.9 per cent to US$303.8 million, mainly affected by the lower CPO prices and production output.

Fresh fruit bunch and total palm product output were also lower at 1.87 million tonnes and 554,000 tonnes respectively, compared with 2.11 million tonnes and 634,000 tonnes a year earlier. This was due to the prolonged dry conditions from El Nino.

Revenue from its palm and laurics segment fell 9.9 per cent to US$1.26 billion mainly from lower prices despite higher sales volume achieved, especially for destination markets, the company said.

However, earnings from this segment rose due to continued improvement in margins.

Revenue from oilseeds segment rose by 30.6 per cent to US$175.6 million in the quarter, mainly due to an increase in crushing volume. "The oilseeds business environment in China remained favourable," the company said.

Selling expenses, which comprises mainly transportation and freight, export tax and levy, advertising and promotion expenses and salaries, rose 50.4 per cent to US$152.1 million in the period due to higher export levy incurred in Indonesia and higher freight costs and promotion expenses, in line with the larger sales volume for the palm and laurics segment.

Earnings per share for the period was 0.74 US cents, compared with loss per share of 0.03 US cents a year earlier.

Net asset value per share was 30 US cents at March 31, up from 29 US cents at Dec 31.

The company said its production will be negatively affected by the El Nino weather condition although the impact may be mitigated by higher CPO prices, resulting from tighter supply and increased domestic demand following Indonesia's biodiesel programme.

"Our expanded downstream assets have supported (the company) during this difficult period, resulting in a good set of results for the company," chairman and chief executive Franky O Widjaja said in a statement. It will stay focused on value chain optimisation across its integrated business model, he added.

The counter closed one cent higher at 37 cents on Friday. Its results were posted after markets closed.

wrennie@sph.com.sg