Bumitama Agri’s 9M net profit surges to 2.8t rupiah on higher palm oil prices

INDONESIAN palm oil producer Bumitama Agri saw its net profit for the first nine months of 2022 surge to 2.8 trillion rupiah (S$247.4 million), more than double its net profit of 1.1 trillion rupiah in the corresponding year-ago period.

Revenue recorded for the group’s nine months reached 12.6 trillion rupiah, up 48 per cent from the 8.5 trillion rupiah it recorded the year before. The rise in revenue was mainly attributable to the higher selling price of crude palm oil (CPO), which accounted for 86 per cent of total sales within the period, the group said in a quarterly performance update.

Average selling price (ASP) climbed 47 per cent year on year to reach 12,889 rupiah per kg for the nine months, marking the third year of successive rise in ASP for Bumitama Agri. This follows the trajectory of palm oil prices in the global markets, with supply deficit cited as the reason by industry analysts, the group said.

Its Ebitda (earnings before interest, taxes, depreciation, and amortisation) and net margins reached 40.1 per cent and 22.6 per cent – a “decade high” level for the group, it said, despite rising cost pressures and the normalisation of commodity prices. Its previous peak was last recorded for its full 2012 financial year.

The group noted the “significant rise” in palm oil price in the last three years which has boosted Bumitama Agri’s financial performance, as well as its resilient production in the same period amid the “triple dip” La Nina weather phenomenon, which is expected to last till early 2023.

Shares of Bumitama closed at S$0.615 on Monday, up S$0.015 or 2.5 per cent before the results release.