Bumitama Agri Q1 profit drops 52.3% on lower palm oil prices

SINGAPORE - Bumitama Agri on Tuesday (May 14) posted a 52.3 per cent slide in its first-quarter net profit to 110.61 billion rupiah (S$10.5 million), from 231.77 billion rupiah a year ago, on the back of decreasing average selling prices of crude palm oil (CPO) and higher expenses.

Earnings per share for the three months to March 31 was 63 rupiah, down from 132 rupiah the year before. No dividend has been declared for the quarter, unchanged from a year ago. Shares of the Indonesian company last closed at $0.685, down one cent.

The group's revenue fell 12.1 per cent to 1.68 trillion rupiah, from 1.91 trillion rupiah a year ago. This was mainly due to decreases in the average selling prices of CPO and palm kernel (PK) by 16.3 per cent and 38.3 per cent respectively, offsetting the increase in sales volume for both CPO and PK.

The group's CPO revenue fell 8.7 per cent to 1.47 trillion rupiah, from 1.61 trillion rupiah a year ago, while revenue from PK fell 30.7 per cent to 205.08 billion rupiah, from 295.82 billion rupiah a year ago.

The group also said it recorded marginal growth in its palm product production compared with a year ago, which was "negated by the downturn" in palm oil prices which had not recovered.

The group also saw selling expenses increase to 90.60 billion rupiah, from 49.16 billion rupiah a year ago. Finance costs was also higher at 56.45 billion rupiah, versus 46.01 billion rupiah a year ago.

On outlook, Bumitama Agri said that a high stock level in the palm oil industry has kept palm oil prices low.

"We do not foresee any changes in palm oil prices in the near future unless there are changes affecting supply and demand dynamics," it said.

The group is also anticipating improvement in its production volume to support and mitigate the impact of low palm oil prices. It will continue to strengthen its business strategies, improve cost management and increase contributions from newly-matured plantations, it added.