HALCYON Agri Corporation : 5VJ 0%, which is the target of a mandatory offer, posted an operating loss of US$2.2 million for its third quarter ended Sep 30, 2022, compared to the operating profit of US$0.7 million a year earlier.

Core earnings before interest, taxes, depreciation, and amortisation (Ebitda) was at US$10.2 million, up year on year from US$9.4 million in Q3 2021, but down quarter on quarter from US$16.2 million in Q2 2022.

Meanwhile, gross profit for the period was up 13.3 per cent on-year to US$39.1 million, while revenue rose 17.9 per cent on-year to US$709.8 million, said the natural rubber supplier on Monday (Nov 21).

The company noted that its sales volume for the quarter rose to 394,684 metric tonnes, from 330,474 metric tonnes from a year earlier, which it attributed to its “timely capture of market demand through its global pole position and vertically integrated capabilities”.

A recent decline in rubber prices had resulted in “some level of margin compression” in its plantation and processing businesses.

But this was offset by a stronger performance in its distribution business in destination markets, the company said.

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Li Xuetao, chief executive of Halcyon Agri, said the company remains “encouraged and cautiously optimistic on our prospects in the remaining months” of 2022.

He said: “The recent interest rate increases by the US Federal Reserve will inevitably affect global demand, but this could be offset by the resurgence of demand upon China’s reopening.”

Last Wednesday, Shanghai Stock Exchange-listed China Hainan Rubber Industry Group said it will acquire 574.2 million shares in Halcyon Agri at US$0.315 apiece, for a total cash consideration of US$180.9 million.

This represents a 36 per cent stake in Halcyon Agri; the share purchase will also trigger a mandator general offer (MGO) for the Singapore-listed company.

Li noted that the company’s businesses will operate as usual while the share purchase and MGO takes time.

“Halcyon Agri views this transaction positively, as it can further augment our position as the leading integrated supply chain manager,” he added.

Shares of Halcyon Agri closed flat at S$0.38 on Monday, before the release of the results.