SINGAPORE (July 28): IndoAgri, the integrated agribusiness group, reported 2Q17 more than tripled to $10 million from $3 million a year ago while 1H17 earnings more than doubled to $28 million from $13 million.

IndoAgri says the improved 2Q and 1H performance was attributed a strong recovery in palm production and improved contribution from CMAA, its sugar JV in Brazil, in addition to higher average selling prices of agriculture crops.

EBITDA up 77% y-o-y in 1H17 on higher contribution from Plantation Division and improved results from associates CMAA.

The group reported consolidated revenue of $433 million in 2Q and $895 million in 1H17, increasing 15% and 27% y-o-y. The revenue growth was attributable to higher sales from Plantation and Edible Oils & Fats (EOF) Divisions.

Plantation Division achieved a 15% revenue growth in 2Q on higher sales volume of palm products, and rubber sales. 1H revenue grew 33% y-o-y, reflecting mainly the effects of higher sales volume and average selling prices of palm products and rubber.

EOF Division continued to perform well with revenue growing 5% in 2Q and 16% in 1H mainly attributable to higher sales of edible oil and stearin products.

Gross profit declined 6% to 69 million in 2Q due to the effect of higher CPO input costs in EOF Division and higher palm production costs arising from timing in fertiliser application. 1H gross profit increased 39% to 180 million on higher sales volume and selling prices of palm products.

IndoAgri says agricultural commodity prices remain volatile on expected recovery in palm and other competing vegetable oil production, and lower growth in key markets like China.

The volatility is further aggravated by the EU’s proposed legislation changes in April to ban the use of vegetable oils such as palm oil, soy and rapeseed for biofuels by 2020, and stricter regulations over certified and sustainable vegetable oil throughout EU.

Shares of IndoAgri closed 1 cent higher at 48 cents.