Golden Agri ends 2Q and 1H with net losses on lower yields and CPO prices

Golden Agri ends 2Q and 1H with net losses on lower yields and CPO prices

By: 
PC Lee
14/08/18, 03:42 pm

SINGAPORE (Aug 14): Golden Agri-Resources reported a net loss of US$39 million ($53.5 million) for the 2Q ended June compared with earnings of US$22 million a year ago even as revenue grew 6% to US$1.86 billion from a year ago.

For the 1H period ended June, net loss came in at US$27 million from earnings of US$59 million a year earlier. This came on the back of a 3.3% fall in 1H revenue revenue to US$3.68 billion.

Sales from its plantation and palm oil mills segment fell by 18.9% at US$684.2 million, mainly due to decreases in production yield and CPO prices as well as higher inventory level.

Fresh fruit bunch production (FFB) declined to 4.6 million tonnes from 4.7 million tonnes a year ago while palm product output declined to 1.32 million tonnes from 1.34 million tonne mainly affected by tree stress after the high production in 2017 following the recovery from El Nino weather condition.

In 1H, average international CPO price was US$632 per tonne compared to US$702 per tonne a year ago. Consequently, profit from plantations and palm oil mills fell by 19.1% to US$197.2 million.

Sales from the palm and laurics segment was marginally lower at US$3.3 billion in 1H mainly due to lower average net realised prices. Profit decreased by 42.6% to US$45.3 million with lower margin as CPO market prices were affected by the recent intervention in commodity markets by governments like in India and Malaysia as well as the changes in US-China trade tariffs, coupled with untimely purchase of feedstocks for the festive season stock building.

Sales from the oilseeds segment decreased by 31.5% to US$242.5 million mainly due to lower sales and crushing volume. Oilseeds segment recorded a loss of US$4.6 million, dragged down by lower volume and higher input prices driven by the uncertainty of the changes in trade policies between US and China.

Golden Agri also recorded a net foreign exchange loss of US$17.1 million for the first half of 2018, a reversal of a US$3.7 million net gain a year earlier due to the weakening of Indonesian rupiah-denominated assets against the US dollar during the period.

In its outlook, CEO Franky Widjaja said he welcomes the Indonesian government's plan to pursue a higher biodiesel mixture mandate amid the appreciation of crude oil prices as part of the government's efforts to achieve independence in the energy sector while reducing greenhouse gas emissions.

As at 2,40pm, shares in Golden Agri-Resources are down 1 cent at 27.5 cents with 2.6 million shares traded.

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