Bumitama Agri H1 net profit lifted to 2.2t rupiah, warns of stablising CPO price

Uma Devi
Published Fri, Aug 12, 2022 · 06:37 PM

PALM oil producer Bumitama Agri : P8Z 0% on Friday (Aug 12) reported a net profit of 2.2 trillion rupiah (S$205.5 million) for the first half of the year ended June, up from earnings of 484 billion rupiah in the corresponding year-ago period. 

Revenue for H1 was up 64.9 per cent year on year to just under 9 billion rupiah from 5.4 billion rupiah, due mainly to an increase in the average sales prices of crude palm oil (CPO) and palm kernel (PK). 

Revenue contributions from CPO was up 63.3 per cent to 7.6 trillion rupiah, and revenue from PK was up 74.5 per cent to 1.4 trillion rupiah. 

Cost of sales for the period rose 21.6 per cent to 5.2 trillion rupiah, due to a higher purchase price for fresh fruit bunch (FFB), fertilisers and fuel during the period. Gross profit more than trebled to 3.8 trillion rupiah.

The board of directors has declared an interim cash dividend of S$0.0125 per share, up from S$0.0045 per share in H1 last year. Shareholders can expect to receive the dividend on Sep 16. 

Selling prices for CPO averaged 14,327 rupiah per kilogram in H1, which was 74.7 per cent higher than H1 last year. PK selling prices were up 66.8 per cent to 11,330 rupiah per kilogram. 

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Bumitama’s quarterly FFB yield spiked in Q2 2022 to 6.1 tonnes per hectare, a new record for the group. 

The group said the elevated palm oil price within the period pushed its Ebitda (earnings before interest, tax, depreciation and amortisation) margin to a new all-time high. Ebitda margin stood at 45.3 per cent in Q2 and 42.1 per cent in H1, which surpassed the previous peak in the last commodity boom 10 years ago, Bumitama said.

Looking ahead, the group said CPO prices are expected to trend downward for H2 this year from the average of H1, as Indonesia reintegrates into the global export market, and the industry heads into a higher production season. 

It said: “The market price of palm oil showed signs of stabilising in late July as the commodity is being traded at considerable discount versus its vegetable-oil substitutes and energy alternatives.” 

Following the volume recovery in the second quarter of 2022, Bumitama said the production trend for its plantation estates remains robust. 

It expects the ongoing Russia-Ukraine war, as well as the vigorous implementation of Indonesia’s biofuel programme, to also support palm oil prices.

Shares of Bumitama closed at S$0.645 on Friday, up 3.2 per cent or S$0.02. 

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