Haze-linked First Resources, Bumitama post higher profits for Q3

SINGAPORE – Two palm oil companies linked to the transboundary haze in October reported higher profits for the third quarter ended Sept 30, in separate business updates published on the morning of Nov 13.

Palm oil producer First Resources posted a 40.1% rise in its underlying net profit to US$122.7 million (S$158 million) for the third quarter of 2026, from US$87.5 million in the year-ago period.

The increase was boosted by higher sales of palm oil products and fruit bunches harvested from oil palms, it said.

Sales were up 24.9% at US$578.6 million for the quarter, compared with US$463.3 million in the third quarter of 2025.

Earnings before interest, taxes, depreciation and amortisation rose 26.6% to US$207.4 million in the third quarter of 2026, up from US$163.8 million a year ago.

For the nine months ended Sept 30, sales grew 36.5% year on year to US$1.6 billion, driven by higher sales volumes.

A net inventory drawdown of 28,000 tonnes over the nine-month period, compared with a build-up of 80,000 tonnes in the corresponding period in 2025, also supported higher sales volumes.

The group’s stronger production output in the first nine months of 2026 was also attributable in part to the full nine-month contribution from Austindo Nusantara Jaya, an Indonesian agribusiness company acquired in May 2025.

However, profits were partially offset by foreign currency translation losses resulting from the depreciation of the Indonesian rupiah against the US dollar.

The group said it expects demand for palm oil to remain supported by Indonesia’s biodiesel programme.

In addition, elevated crude oil prices arising from geopolitical tensions in the Middle East are expected to support biodiesel economics and crude palm oil demand.

Performance supported by productivity improvements

Meanwhile, Bumitama reported a 1.9% increase in its net profit to 614.1 billion rupiah (S$43 million) for the quarter ended Sept 30, compared with 602.9 billion rupiah in the previous corresponding period.

For the nine-month period, net profit rose 30.6% to 2.4 trillion rupiah, up from 1.9 trillion rupiah in the year-ago period.

Revenue increased 9.7% to 4.2 trillion rupiah in the third quarter, up from 3.9 trillion rupiah a year ago. For the nine-month period, revenue was up 20% at 16.3 trillion rupiah.

Bumitama said its performance was supported by productivity improvements in its plantations and mills, particularly during the earlier part of the quarter.

In July, internal production of fresh fruit bunches reached 383,203 tonnes, accounting for almost 40% of the quarter’s production.

Quarterly production of crude palm oil increased 14% year on year to 368,323 tonnes.

However, exceptionally dry weather conditions in its Kalimantan estates during the third quarter put additional pressure on logistics infrastructure and disrupted shipments, said Bumitama.

Consequently, third-quarter revenue declined compared with the second quarter.

The prolonged dry season also heightened the risk of land and forest fires across parts of Kalimantan.

Fires affected certain areas within or adjoining the group’s concessions, including community-managed, conservation and unplanted land, the group noted.

Bumitama said that elevated energy prices and Indonesia’s biodiesel programme coupled with a relatively constrained palm oil supply growth could provide a “supportive backdrop” for palm oil fundamentals heading into 2027.

However, market conditions remain subject to uncertainty. These include changes in global energy prices, supply-and-demand dynamics, and the potential effects of prolonged dry weather on future production, it added.

Both First Resources and Bumitama reiterated their commitment to upholding a zero-burning policy, and cooperating with the Indonesian and Singapore authorities in relation to the haze.

Shares of First Resources closed flat at $2.79 and those of Bumitama closed flat at $1.39 on Nov 12, before the updates. THE BUSINESS TIMES