HALCYON Agri Corporation : 5VJ 0% on Monday (Aug 14) sank into the red with a US$62.1 million net loss for the first half ended Jun 30. 

This was compared with a net profit of US$1 million in the corresponding year-ago period, the mainboard-listed rubber producer said in its results. 

Halcyon Agri’s first half revenue declined 6.1 per cent year on year to US$1.2 million, from US$1.3 million. This was attributed to a 23.9 per cent decrease in revenue per tonne to US$1,535 in H1 FY2023, from US$2,017 in H1 FY2022, in line with natural rubber market prices. 

This was partially offset by a 23.4 per cent climb in sales volume to 789,966 tonnes. 

Gross profit also lowered 29.2 per cent to US$60.9 million, from US$85.9 million. This was caused by margin compression across key origins, as a decline in rubber prices was met with an increase in raw material costs, driven by scarcity. 

The rubber producer had on Aug 7 guided for a net loss after tax for the six months, also based on margin compression as a result of sluggish rubber prices.

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This was due to slower global demand and raw material prices surging, as well as higher net financing costs as interest rates continued to rise. 

It also attributed the loss to a loan to a third party, where the recoverable sum is likely to be below its carrying amount and “thus will be recognising additional impairment provision”. 

Loss per share for the period was US$0.0413, compared with a previous loss per share of US$0.0017.

Li Xuetao, Halcyon Agri’s chief executive, said operating conditions will remain challenging, but the group anticipates a demand recovery in the fourth quarter of 2023. 

The group highlighted it had successfully closed two syndicated loans to refinance its existing indebtedness.

The first is a syndicated one-year working capital loan of US$189.6 million on Jun 19, led by the Industrial and Commercial Bank of China, which may be upsized to US$300 million.

On Jul 31, Halcyon Agri closed a one-year sustainability-linked syndicated loan of up to US$300 million, led and advised by China CITIC Bank International. 

The facility features sustainability-linked elements, for which the interest rate will be tied to the group’s achievement of ESG-related key performance indicators, such as power and water consumption intensity, as well as tracing the source of the group’s raw materials. 

Shares of Halcyon Agri have been suspended from trading since Apr 25, 2023. (see *Amendment note)

*Amendment note: This article previously stated that Halcyon Agri shares ended flat. It has in fact been suspended from trading since April.