SINGAPORE (Feb 28): Indofood Agri Resources (IndoAgri) has sunk into a loss of Rp 211.7 billion ($20 million) for 4Q18 compared to Rp 76.9 billion in profit a year ago, due to significantly lower profit in the Plantation Division arising from weak commodity prices.

As such, the group has reported Rp 211.8 billion in overall losses for FY18, as opposed to earnings of Rp 447.3 million for the previous year.

Revenue for 4Q rose 6.5% to Rp 3.8 trillion from Rp 3.6 trillion in 4Q17, due to sales growth in the Edible Oils and Fats (EOF) Division.

This was further supported with higher external sales in the Plantation Division, which continued to report strong production recovery with fresh fruit bunches (FFB) nucleus and crude palm oil (CPO) production growing 17% and 20% y-o-y over the quarter.

The higher sales volume of CPO and palm kernel (PK) related products was however offset by lower CPO (-27%) and PK (-47%) prices.

Selling and distribution expenses, too, grew 21% over the quarter due to increased advertising and promotion expenses.

Over the quarter, the group reported a narrower loss of Rp 12.7 billion for share of results of associate companies compared to a loss of Rp22.1 billion in 4Q17, due to lower losses in its Philippines sugar business, FPNRL.

Share of results of joint ventures however sunk into an Rp 30.9 billion loss as opposed to earnings of Rp 41.3 billion a year ago, due to the impact of falling sugar prices on the Brazil sugar operations, CMAA.

As at end-2018, cash and cash equivalents stood at Rp 2.2 trillion, down from 2.9 trillion a year ago.

IndoAgri says it is expecting continued pressure from ongoing economic uncertainties and volatile CPO prices going forward, although its operations will continue to be supported by the large domestic consumption and economic conditions in Indonesia.

“We are progressively developing the immature estates and replanting older oil palm trees in Riau and North Sumatra. As a price taker, our plantations must always be a low-cost producer, and so we will continue to optimise the value chain, increase agricultural outputs, improve cost control and raise plantation productivity,” says the group.

Shares in IndoAgri closed flat at 22 cents on Wednesday.