Rubber processor Halcyon Agri has swung back into the black, reporting a net profit of US$11 million (S$15.5 million) in the first quarter, against a net loss of US$6.6 million a year ago.
This is the group's first set of consolidated results since it acquired industry peer GMG Global last year as part of a series of transactions to consolidate the natural rubber business of Sinochem International Corp, which is Halcyon's major shareholder.
Revenue in the three months ended March 31 more than tripled to US$558 million as the group added 19 processing factories to its stable. First-quarter sales volume rose to 286,134 tonnes, from 150,203 tonnes a year ago.
"We're tracking for a US$2 billion top line for the year," chief executive Robert Meyer told The Straits Times yesterday.
He said a large percentage of the group's business is fixed in terms of long-term contracts, and Halcyon expects to deliver 1.1 million tonnes at an average price of US$1,800 per tonne this year.
Natural rubber prices have recovered since the fourth quarter last year but will stay choppy, Mr Meyer said: "If you look at my segmental results, you can see the plantations made money, processing made money, but distribution made almost no money (US$700,000 operating profit) because that gets whipsawed around by (rubber price) volatility."
AT A GLANCE
REVENUE: US$558 million (+204.7%)
NET PROFIT: US$11 million (n/m)
The group's single remaining loss-making unit, Teck Bee Hang, comprises five GMG factories in Thailand that have been put under review. The review, which should be completed in the next few weeks, could result in a sale or reconfiguration of Teck Bee Hang.
Halcyon expects to complete the sale of 35 per cent of GMG's Siat early in the third quarter.
Once that is done, Halcyon will be back on the acquisition trail. The group will look downstream, midstream and upstream, across global tyre and non-tyre majors for targets, Mr Meyer said.
Earnings per share was 0.97 Singapore cent, up from a loss per share of 0.58 Singapore cent in the first quarter last year. Net asset value per share was was 59.21 Singapore cents as at March 31, up from 58.74 Singapore cents as at Dec 31.
Results were announced before the market opened. The counter fell one cent or 1.67 per cent to 59 cents yesterday.