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Biological assets and foreign exchange gains boost Indofood Agri's Q1 net profit

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Indonesian palm oil producer Indofood Agri reported a net profit of 95 billion rupiah (S$9.7 million) for its first quarter ended March 31, 2016.

INDONESIAN palm oil producer Indofood Agri reported a net profit of 95 billion rupiah (S$9.7 million) for its first quarter ended March 31, 2016.

Revenue rose 18 per cent to 3.1 trillion rupiah from 2.7 trillion rupiah a year ago, due to higher crude palm oil sales to external parties and stronger sales by the edible oils and fats division.

Gross profit was down 13 per cent to 534 billion rupiah due to lower average selling prices of palm products and rubber.

Net profit was boosted by an 84 billion rupiah gain arising from changes in fair value of biological assets. Indofood said that the biological assets revaluation gain was due to the net changes in the fair values of agricultural produce.

Net profit was also boosted by 121 billion rupiah in foreign exchange gains as the rupiah strengthened against the US dollar.

Excluding biological assets revaluation gains and foreign exchange gains, core net loss after tax was 68 billion rupiah, Indofood said.

The company's Indonesia planted area remained unchanged at around 300,000 hectares at end-March, with 246,000 of planted oil palm and 55,000 of other crops such as rubber, sugar cane, timber, cocoa and tea.

In Brazil, planted sugar cane area decreased by around 3,000 hectares to 50,000 hectares at end-March compared with three months ago, mainly due third party replanting in progress.

The company said that key strategies in 2016 include prioritising capital expenditure on immature plantings, and expanding milling facilities for organic growth.

Net asset value per share was 8,804 rupiah at end-March, up slightly from 8,729 rupiah at end-2015.

Indofood last traded at S$0.54 a share.