Golden Agri Resources, the world’s second-largest palm oil producer, said third-quarter profit rose 41%, aided by higher output and rising prices.

Net income rose to US$99.17 million ($127.5 million) for the quarter ended Sept. 30 compared with US$70.56 million a year-earlier, the Singapore-based company said today in a statement.

 

“The robust fundamentals of the palm oil industry are reflected in the crude palm oil price performance,” Chief Executive Officer Franky Widjaja said in the statement. “We believe that the strong demand of edible oils and their tightness in global supply will remain.”

 

Palm oil output rose 21% to 608,000 metric tons from 503,000 tons in the previous quarter, it said. Sales for the quarter rose 43% to US$964.74 million from US$672.79 million a year earlier.

 

Golden Agri gained 3.3% to 77.5 cents in the morning session. The results were announced during the trading break.

 

For the first nine months, cumulative production of palm oil reached 1.56 million tons, 8% lower than the same period last year due to “prolonged rainy weather” hurting yields in the first half, the company said. The average selling prices of palm oil in Indonesia rose 28% on-year in the nine-month period, it said.

 

Golden Agri said it added 7,800 hectares of oil palm plantations in the first nine months, giving it 435,000 hectares, the largest in Indonesia.

 

Oil palms produce fruit perennially, with production typically rising in the second half. Indonesia is the largest producer of palm oil, ahead of Malaysia. Drought earlier in the year had eroded yields, more so in Malaysia than Indonesia, analysts from brokerages, including DBSVickers Securities Singapore, have said.