SINGAPORE (Oct 31): Indofood Agri Resources (IndoAgri) reported earnings of Rp8.8 billion ($0.8 million) for the 3Q ended Sept, representing a 91.3% plunge from its 3Q17 earnings of Rp100.5 billion a year ago.

The group attributes this quarter’s poor performance mainly to a fall in sales and profit in its plantation division, weak commodity prices and higher crude palm oil (CPO) stock, as well as forex impacts due to the weakening of the Indonesian rupiah.

Revenue for the quarter remained steady at Rp3.7 trillion, buoyed by a strong 3Q performance in the edible oils & fats (EOF) division that partly offset the fall in contributions from plantation.

Notably, the plantation division registered a 11% decline in sales due to lower average selling prices (ASPs) and lower sales volume of CPO and palm kernel (PK) related products arising from timing in shipment.

With the effects of lower selling prices and sales volume of palm products – coupled with higher palm production costs arising from wage inflation and higher fertiliser application – gross profit declined 13% to Rp624.3 billion from Rp717.9 billion a year ago.

Over the quarter, a Rp39.3 billion foreign exchange loss was registered compared to a forex loss of Rp21.5 billion a year ago.

Share of results of joint ventures fell 31.5% y-o-y to Rp48.3 billion from Rp70.5 billion previously,

Going forward, IndoAgri believes its operations will continue to be supported by a positive domestic economic outlook and large domestic palm consumption. The group says it will continue to strengthen the fundamentals and improve margins through better yielding crops, cost efficiencies and other innovations to improve productivity. 

Shares in IndoAgri closed 2.4% lower at 20 cents on Tuesday.