Bumitama Agri Q3 profit inches up 1.4% to 270b rupiah

BUMITAMA Agri saw only a slight 1.4 per cent rise in third-quarter net profit to 269.89 billion rupiah (S$25.3 million) due to a drop in the selling prices of crude palm oil and palm kernel, the Indonesian company announced on Monday before the stock market opened.

Revenue for the three months ended Sept 30 slipped 6.5 per cent to 1.92 trillion rupiah from a year ago.

Cost of sales dropped 7.6 per cent to 1.33 trillion rupiah, while interest income increased by 59.6 per cent to 53.6 billion rupiah, mainly on the back of advances extended to the plasma farmers.

But the company saw foreign exchange losses swell to 27.5 billion rupiah from 6.43 billion rupiah a year ago, mainly due to translation losses on US dollar denominated borrowings from the weakening of the rupiah against the greenback.

The company said the increase in the supply of palm oil continues to keep palm oil prices low.

"We do not foresee any changes in palm oil prices in the near future unless there are changes affecting supply and demand dynamics," it said in a statement.

Bumitama said it anticipates improvement in its production volume to continue into the remaining months of 2018 which will help to mitigate the impact of low palm oil prices.

"The group will continue to strengthen its business strategies, improve cost management and increase contribution from newly matured plantations," it added.

Bumitama shares last traded at 62 Singapore cents on Friday.