First Resources, the oil palm plantation company, increased its net profit attributable to shareholders (PATMI) by 7% to Rp1,169 billion ($158 million) for the year ended 31 December 2009 (FY2009). This was despite a 18% year-on-year (y-o-y) fall in revenue which was due mainly to a 24% drop in average crude palm oil (CPO) selling prices.

For FY2009, First Resources is proposing a final dividend of 1.18 cents per share, on top of the interim dividend of 1.00 cents per share paid in September 2009. This represents a 56% increase over last year’s dividend of 1.40 cents per share.

Lower CPO selling prices were mitigated by higher sales volume, lower cost of production and lower export taxes. Production of fresh fruit bunches (FFB) increased by 10% to 1.5 million tonness, representing a credible FFB yield per hectare of 21.5 tonness, while CPO extraction rate rose to 23.7%, ranking among the highest in the industry. As a result, the group’s CPO production jumped 14% to a record 368,631 tonness. Sales volumes of CPO and palm kernel rose by 8% and 6% respectively, in line with the higher production volumes.

Through stringent cost management, the group says it achieved one of the lowest production cash cost levels in the industry at US$180 per tonnes of nucleus CPO. This contributed to a flat cost of sales despite the strong growth in sales volume. group profit in FY2009 was also shored up by lower export taxes, which dipped sharply due to the progressive tax structure, providing a natural counter to soften the profit impact of lower CPO prices.

First Resources says it generated a robust operational cashflow of Rp405 billion (US$39.0 million), which partially funded the group’s investments in new plantings as well as a new CPO processing mill. The group’s cash balance stood at Rp1,688 billion (US$179.6 million), boosted by its inaugural issuance of US$100 million convertible bonds in September 2009. With healthy cashflows and a strengthened balance sheet, the group has sufficient resources to execute its organic expansion plans in the near term.