SINGAPORE (Nov 12): Bumitama Agri announced 3Q18 earnings increased by 1.4% to IDR 270 billion ($25.3 million), compared to IDR 266.3 billion in 3Q17.

This brings 9M18 earnings to IDR 889.7 billion, 7.2% higher than IDR 829.7 billion in 9M17.

Revenue for the quarter dropped by 6.5% to IDR 1,919 billion from IDR 2,051 billion a year ago, mainly attributable to the decrease in the selling price of Crude Palm Oil (CPO) and Palm Kernel (PK).

As cost of sales dropped 7.6% y-o-y to IDR 1,332 billion, 3Q18 gross profit came in at IDR 586.8 billion, 3.7% lower than IDR 609.5 billion last year.

Interest income increased by 59.6% to IDR 53.6 billion from IDR 33.6 billion in the previous year, mainly consisting of interest income earned from advances extended to the plasma farmers..

The group registered foreign exchange losses of IDR 27.5 billion, a significant increase from IDR 6.43 billion a year ago, mainly due to translation losses on USD denominated borrowings in the group’s IDR financial statements as a result of the depreciation of IDR against USD during the current period.

Other expenses saw 98.2% decrease to IDR 0.79 billion from IDR 42.9 million last year.

Looking forward, the increase in the supply of palm oil continues to keep palm oil prices low.

“We do not foresee any changes in palm oil prices in the near future unless there are changes affecting supply and demand dynamics,” says the group in a Monday results filing.

In addition, the group anticipates improvement to its production volume to continue into the remaining months of 2018 which will help to mitigate the impact of low palm oil prices. It will also continue to strengthen its business strategies, improve cost management and increase contribution from newly matured plantations.

Shares in Bumitama Agri last traded at 62 cents on Friday.

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