SINGAPORE - Golden Agri-Resources reported an 83.5 per cent year-on-year dip in first quarter net profit to US$17.2 million (S$23 million), as revenue in the period dropped 18.9 per cent to US$1.55 billion.
But the quarterly earnings still marked an improvement over the fourth quarter last year, when the mainboard-listed palm oil plantation company was hit by a net loss of US$21.9 million.
The decrease in revenue for the three months to March 31 was resulted from lower average crude palm oil prices and weaker production output in Indonesia due to dry weather conditions, the company said when announcing its latest results on May 12 after market close.
"The average international crude palm oil price reduced by 26.5 per cent from US$865 per tonne in 2014 first quarter to US$636 per tonne… Revenue from plantation and palm oil mills segment decreased by 32 per cent to US$340.9 million," it said.
Oilseed revenue also dropped 36.2 per cent year-on-year to US$134.5 million in the quarter, while weaker Indonesian Rupiah against US dollar led to a US$35 million net foreign exchange loss.
Chief executive officer Franky Widjaja stressed that the industry's long term fundamentals remain firm.
"While there may be resistance from the current large soybean production and low crude oil prices, slower crude palm oil output growth and the biodiesel policy in Indonesia bode well for future prices.
"Moreover, we view that global demand of palm oil both for food and non-food continues to be strong, especially in developing countries," Mr Widjaja said.
Meanwhile, Golden Agri maintained that it has complied with Indonesia's regulations, despite a ban by the country's Roundtable on Sustainable Palm Oil to purchase or develop new plantations there following reports of Golden Agri's breach of land acquisition laws.
The company has, however, voluntarily put on hold its land preparation for all new plantings in Indonesia since November 3 2014 to allow parties to resolve the issues.