SINGAPORE - Palm oil producer First Resources has posted a 29.2 per cent fall in first quarter net earnings to US$45 million (S$56.2 million).
Sales in the three months to March 31 slipped by 1.9 per cent to US$177.9 million, mainly due to higher sales volumes from the refinery and processing segment and partially offset by lower average selling prices.
Operating profit fell by 31 per cent to US$60 million, mainly due to the lower average selling prices of crude palm oil and its refined products.
This was partially offset by higher sales volumes from the refinery and processing segment, which was driven by the expansion of the group's processing capacity.
Earnings per share fell to 2.84 US cents from 4.01 US cents previously while net asset value per share firmed to 71 US cents compared to 63 US cents as at Dec 31.
Gross profit fell by 28.9 per cent to US$74.8 million while gross profit margin came in at 42 per cent, down from 60.2 per cent.
The lower gross profit margin was mainly due to the lower average selling prices as well as the increase in purchases of palm oil products from third parties.
Looking ahead, First Resources noted that palm oil prices had remained firm in the first quarter, backed by low inventory levels in Malaysia and Indonesia, seasonal slowdown in production, as well as growing concerns over the dry weather that may result in poorer yields.
With Indonesia's mandatory biodiesel policy, it expects palm oil prices to remain well-supported in the near term, driven by incremental energy-based demand.
"Barring any weather shocks, with yield recovery and contribution from our newly mature plantations, the group expects year-on-year volume growth to continue for the rest of the year."