First Resources posts 16.1% fall in Q3 profit

Singapore

FIRST Resources reported a 16.1 per cent slide in net profit to US$43.14 million for the third quarter ended Sept 30 on the back of lower average selling prices of crude palm oil and its refined products.

This was partially offset by higher sales volumes from the refinery and processing segment on the back of capacity expansion.

During the quarter, revenue edged downwards by 2.8 per cent year-on-year to US$148.76 million. Sales of crude palm oil slipped 10.8 per cent to US$121.8 million, while that of palm kernel was up 39.1 per cent at US$17.07 million. Meanwhile, sales from the refinery and processing segment surged 238.8 per cent to US$131.39 million.

Earnings per share for the quarter worked out to 2.72 US cents, down from 3.25 US cents previously.

Cost of sales rose 12.3 per cent to US$63.07 million fuelled largely by the higher production and sales volumes, in addition to ramping up of operations at its biodiesel, refinery and kernel crushing plants. Gross profit thus fell 11.5 per cent to US$85.7 million. For the quarter, profit from operations slipped 9 per cent to US$71.69 million.

"Palm oil prices have recovered from their recent lows in August, partly as a result of lower than expected inventory levels in Malaysia and Indonesia. However, prices are expected to remain soft due to the weakening discretionary demand for biofuel caused by current narrow price spreads between crude oil and vegetable oils, as well as the sizeable on-going soybean harvest in the United States," the group warned.

The counter closed at S$1.965 on Thursday, down 3.5 cents.