Currency and fair-value gains lifted second-quarter earnings at agribusiness group Indofood Agri Resources, it reported yesterday.
Net profit came in at 29.9 billion rupiah (S$3.1 million), reversing a loss of 33.41 billion rupiah in the same period a year ago.
A 29.6 billion rupiah foreign currency gain and 11.5 billion rupiah gain in fair value of biological assets helped to lift the group's bottom line even as operating expenses climbed and gross profit dipped 7 per cent from a year ago.
Revenue in the three months to June 30 was 3.57 trillion rupiah, down 14 per cent from the same period a year ago, as the El Nino effect hurt palm production and sales from the plantation business.
The plantation division posted an 18 per cent decline in revenue as higher sugar sales failed to offset the lower volume of crude palm oil and palm kernel-related products.
The group benefited from a price recovery in palm products in the second quarter, though prices were still low on a year-to-date basis.
Revenue from the edible oil and fats division rose 5 per cent from the same quarter last year on higher sales volume of edible oil products, though this was partly offset by lower selling prices.
AT A GLANCE
3.57 trillion rupiah (-14%)
29.86 billion rupiah (+190%)
First-half earnings per share was 0.9 Singapore cent, up from a restated loss per share of 0.2 Singapore cent a year ago, while net asset value per share was 83.8 Singapore cents as at June 30, up from a restated 82.6 Singapore cents as at Dec 31.
IndoAgri said in a statement that market conditions remain challenging for the agricultural and commodity sector.
"Agricultural commodity prices remain soft and slower growth in some key markets like China has led to a prolonged period of volatility and uncertainty," the group said.
"These circumstances have aggravated the complex mix peculiar to any agribusiness, such as the weather, export restrictions, the higher co-relationship between the prices of crude oil and various commodities, and the performance of competing crops such as soya bean oil."
Chief executive Mark Wakeford said the group will prioritise capital expenditure on immature plantings of around 51,000ha and the expansion of milling facilities for the rest of the year.
Earnings were posted before the market opened. The counter closed up half a cent at 47 cents yesterday.