First Resources' Q1 profit falls 38.5%, hit by lower palm-oil prices

FIRST Resources on Monday reported a 38.5 per cent drop in net profit to US$27.7 million for the first quarter ended March 31, 2015, from US$45 million in the year-ago period, as profit from operations declined 24 per cent due to lower average selling prices and sales volumes of palm-based products.

Revenue fell 46 per cent to US$96.3 million from US$178 million. Cost of sales slipped 63 per cent to US$38 million mainly due to lower sales volumes, decrease in purchases of fresh fruit bunches and palm-oil products from third parties, as well as lower processing costs

Ebitda (earnings before interest, taxes, depreciation and amortisation) saw a 21 per cent decline to US$53.4 million, while Ebitda margin improved to 55.5 per cent from 37.9 per cent a year ago, which was partly contributed by lower purchases from third parties.

Earnings per share stood at 1.75 US cents, down from 2.84 US cents a year ago. No dividend was recommended.

The firm said weakness in crude oil and soya-bean oil prices, coupled with slowing demand in China, will continue to exert pressure on palm-oil prices. It also expects prices to remain weak in the near term as the industry enters the seasonally higher production period.