SINGAPORE - Weak commodity prices and lower contributions from its plantation division dragged mainboard-listed Indofood Agri Resources (IndoAgri) deeper into the red for its fiscal second quarter.
The agribusiness on Wednesday (July 31) posted a net loss attributable to owners of 216.54 billion rupiah (S$21 million) for the three months ended June 30, versus a net loss of 68.60 billion rupiah a year ago.
Loss per share (LPS) for the quarter came in at 1.5 cents, from a loss per share of 0.5 cent in the preceding year.
This came on the back of a 6.6 per cent decline in revenue to 3.14 trillion rupiah this year from 3.37 trillion rupiah last year, mainly attributable to lower contribution from the group's plantation division on lower selling prices of palm products.
In particular, the plantation division saw revenue plunge 19 per cent for the quarter, due to lower selling prices of palm products and lower sales volume of crude palm oil (CPO).
That said, the group's edible oils and fats (EOF) division recorded higher sales volumes of EOF products and higher profitability for the second quarter and half-year ended June 30, IndoAgri noted.
For the half-year period, net loss widened to 274.33 billion rupiah, from a loss of 18.80 billion rupiah last year, attributable to weak operating profit and higher financial expenses, that were partially offset by positive foreign exchange impact.
This translated to an LPS of 1.9 cents, versus a loss per share of 0.1 cent for the year-ago period.
Revenue also slipped 1 per cent to 6.50 trillion rupiah for the six months ended June 30.
Looking ahead, IndoAgri noted that the ongoing US-China trade tensions will continue to affect global trade flows and economic growth, and that these uncertain global developments have negatively impacted the prices of agricultural commodities.
"CPO prices will remain volatile with demand projected from key import markets like China and India, together with the relative price of crude oil which affects biodiesel demand," IndoAgri said.
The company added that Rotterdam CIF (cost, freight and insurance) CPO prices has fallen by 11 per cent to an average of US$533 per tonne in the first half this year, down from US$601 per tonne in FY2018.
"Against this backdrop of a volatile commodity price environment, we prioritise our capital expenditure investment in the growth area and focus on cost control measures and other innovations to increase productivity," IndoAgri said.
