SINGAPORE (Aug 14): Golden Agri-Resources (GAR) has announced earnings of US$59.4 million ($80.9 million) for the 1H17 ended June, down 55.5% from US$133.6 million reported in 1H16 due to the recognition of deferred income tax assets.

Revenue for the half year grew 17.5% to US$3.8 billion compared to US$3.2 billion a year ago, primarily due to higher average crude palm oil (CPO) prices as well as the recovery in palm production.

The plantations and palm oil mills segment saw a 40.7% increase in revenue to US$843.5 million from US$599.3 million on higher production yield and average CPO price, with the average international CPO price at US$702 per tonne compared to US$637 per tonne in 1H16.

Notably, revenue from palm and laurics grew 21% to US$3.4 billion from US$2.8 billion in the previous year on higher sales volume and average net realised prices.

Meanwhile, revenue from the oilseeds and others segments came in marginally higher over the half-year period at 2% and 6% at US$354 million and US$97.6 million, respectively.

The group  however recorded a lower net foreign exchange gain of US$3.7 million in the current period compared to US$30.6 million in 1H16, during which a higher net foreign exchange gain was recorded due to translation gain on Indonesian Rupiah (IDR) denominated assets.

It was also during 1H16 that the IDR strengthened significantly against the USD, whereas fair value gain on forward foreign currency contracts entered to hedge the currency exposure of Malaysian Ringgit (MYR).

Net other operating income fell 48.9% to US$11.9 million from US$23.3 million a year ago due to a lower net gain from changes in fair value of biological assets, as well as lower income from financial assets.

For the second quarter ended June, group earnings stood at US$21.9 million, down 44.7% from US$39.5 million in 2Q16 – whereas revenue for the quarter grew 0.8% o n-year to US$1.8 billion.

“We are pleased to see GAR’s robust performance across all segments in the first six months of 2017. CPO market prices have remained stable despite the increasing production output of the industry,” says Franky Widjaja, chairman and CEO of GAR.

“GAR continues to have a positive outlook for full year 2017 supported by our increasing production volume. At the same time, our business transformation initiatives across the value chain are progressing well with a view towards enhancing our competitive strengths,” he adds.

Shares of GAR closed flat at 38 cents on Monday.

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