First Resources Q1 profit falls 38.5% on lower prices and sales of palm-based products

SINGAPORE - Mainboard-listed First Resources announced on Monday a 38.5 per cent fall in net profit to US$27.7 million for the first quarter ended March 31, 2015, from the year-ago period.

This came about as profit from operations fell 23.8 per cent to US$45.7 million, due largely to lower average selling prices and sales volumes of palm-based products, the company said.

Revenue for the quarter fell 46 per cent to US$96.3 million from US$178 million. Cost of sales slipped 63 per cent to US$38 million mainly due to lower sales volumes, decrease in purchases of fresh fruit bunches and palm-oil products from third parties, as well as lower processing costs

Ebitda (earnings before interest, taxes, depreciation and amortisation) saw a 21 per cent decline to US$53.4 million, while Ebitda margin improved to 55.5 per cent from 37.9 per cent a year ago, which was partly contributed by lower purchases from third parties.

Earnings per share stood at 1.75 US cents, down from 2.84 US cents a year ago. No dividend was recommended.

Looking ahead, the company said weakness in crude oil and soya-bean oil prices, coupled with slowing demand in China, will continue to exert pressure on palm-oil prices. It also expects prices to remain weak in the near term as the industry enters the seasonally higher production period.

It added that the long-term fundamentals of the palm oil industry remains favourable with the higher biodiesel blending mandate in Indonesia and underlying demand growth from emerging markets.

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