Palm oil firm Bumitama Agri Q3 profit rises 33% to $75.7 million

SINGAPORE – Bumitama Agri reported a net profit of 874 billion rupiah (S$75.7 million) for the third quarter ended Sept 30, up 33 per cent from 655 billion rupiah in 2022.

This marked the Indonesian palm oil producer’s first year-on-year improvement in its quarterly performance for 2023.

It also meant that its year-to-date performance gap – compared with the previous year’s record-high performance – was narrowing, said the group in a business update on Tuesday.

Revenue for the third quarter of financial year 2023 rose 20 per cent to 4.3 trillion rupiah from 3.6 trillion rupiah in the same period a year ago, driven by contributions from crude palm oil (CPO) sales and palm kernel.

Over the third quarter, Bumitama said its fresh fruit bunches (FFB) yield hit a record high in July 2023 as its productivity averaged higher. FFB yield for the third quarter rose 3 per cent from the same quarter the year prior, but was 7 per cent lower over the nine-month period compared with the same period a year ago.

While crude palm oil booked its first year-on-year positive in average selling prices, it declined for the first time when compared with the previous quarter.

Within the palm kernel segment, Bumitama said the market conditions for lauric oils remained “uneventful” due to the surplus of substitutes. The segment’s average selling price declined a slight 1 per cent versus the third quarter of financial year 2022.

The group’s earnings before interest, taxes, depreciation and amortisation (Ebitda) climbed 29 per cent year on year to 1.6 trillion rupiah from 1.3 trillion rupiah in the year-ago quarter.

Ebitda margin for the quarter strengthened to 37.6 per cent. This is considerably higher than the group’s 29.7 per cent average in the past 40 quarters, noted Bumitama.

For the nine months ended September 2023, the group’s net profit fell 27 per cent year on year to 2.1 trillion rupiah from 2.8 trillion rupiah.

Revenue declined 6 per cent to 11.8 trillion rupiah from 12.6 trillion rupiah in the first nine months of financial year 2022. The group said this came as a volume increase in crude palm oil sales was mostly offset by a fall in average selling prices, while palm kernels “did not fare well” due to the still-soft market conditions for lauric oil.

FFB yield over the nine-month period was down 7 per cent year on year.

Average selling prices for crude palm oil and palm kernel fell 12 per cent and 41 per cent respectively, versus the levels in the nine-month period for financial year 2022.

Nine-month Ebitda fell 27 per cent year on year to 3.7 trillion rupiah from 5 trillion rupiah. While Ebitda margin declined 8.9 per cent to 31.2 per cent from 40.1 per cent in the prior year, the group noted that this was higher than its 30.4 per cent average over the past decade.

Shares of Bumitama closed 3.5 cents, or 6.1 per cent, higher at 60.5 cents on Tuesday. THE BUSINESS TIMES