First Resources posts 5.8% lower H2 net profit after booking expected credit losses

FIRST Resources on Friday reported net profit of US$56.4 million for the half year ended December 2020, down 5.8 per cent from its H2 FY2019 net profit of US$59.9 million despite higher revenue.

In its results filing before the market opened, the Indonesian palm oil producer attributed the percentage drop in profitability to expected credit losses arising from changes in fair value of biological assets and unquoted investment.

Excluding the writeback of expected credit losses, the group said its underlying net profit would have declined a wider 10.1 per cent for the half-year period.

Earnings per share for H2 2020 came in at 3.61 US cents, down from 3.78 cents in the preceding year.

Revenue grew 18.8 per cent to US$382.2 million from S$321.9 million a year ago, due to higher average selling prices.

The latest set of results brings First Resource's net profit for the full year to US$99.7 million, up 11.8 per cent from its FY2019 net profit of US$89.1 million.

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Revenue for the year was US$660.4 million, up 7.4 per cent from the previous year's revenue of US$614.9 million.

After revising its dividend policy to distribute up to 50 per cent of underlying net profit annually, the group has proposed a final dividend of two Singapore cents per share, which will bring its FY2020 ordinary dividend to three Singapore cents per share to represent 37 per cent of the group's underlying net profit for the year.

If approved by shareholders at the group's annual general meeting on April 29, the proposed final dividend will be paid out on May 18.

As at 9.39am on Friday, shares of First Resources were trading S$0.04 or 2.5 per cent lower at S$1.58.