First Resources Q1 net profit up 53.1% at US$96.6 million on stronger sales, production output

[SINGAPORE] Indonesian palm oil producer First Resources on Friday (May 15) posted a net profit of US$96.6 million for its first quarter ended Mar 31, up 53.1 per cent from US$63.1 million for the year-ago period.

This was underpinned by a 70.4 per cent year-on-year increase in sales to US$477.2 million for Q1 2026, from US$280 million previously.

The mainboard-listed company noted that heightened geopolitical tensions in the Middle East disrupted key maritime trade routes and led to higher freight and insurance costs, alongside increased prices of fertiliser and raw materials.

“Elevated energy prices associated with these developments have supported demand for palm oil and other vegetable oils in biofuel applications,” it said.

Higher sales were attributed to stronger production output, increased purchases of fresh fruit bunches (FFB) and palm oil products from third parties, and a net inventory drawdown of 59,000 tonnes for the quarter, versus a build-up of 18,000 tonnes in the year-ago period.

FFB harvested in Q1 2026 stood at around one million tonnes, up 20 per cent from 874,799 tonnes in Q1 2025. Crude palm oil production climbed 34.5 per cent on the year to 311,833 tonnes from 231,861 tonnes, while palm kernel production grew 30.6 per cent to 67,925 tonnes from 52,027 tonnes.

Highlighting that Indonesia’s national biodiesel programme was a “key demand driver for palm oil”, the group noted that future increases in blending mandates – including a transition to B50 if implemented – would “further tighten global supply and demand conditions”.

Production volumes for Q1 2026 were also boosted by a full quarter of contributions from Austindo Nusantara Jaya, an Indonesian firm engaged in the palm oil plantation business, following its acquisition in 2025.

First Resources announced its purchase of a 91.2 per cent stake in Austindo Nusantara Jaya in March 2025 and its purchase of the remaining shares in August 2025.

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For the quarter, earnings before interest, taxes, depreciation and amortisation increased 54.9 per cent to US$165.7 million from US$107 million in the previous corresponding period.

Equity attributable to owners of the company rose 2.8 per cent to US$1.58 billion as at Mar 31, from US$1.54 billion as at Dec 31, 2025.

This came as profits generated during the quarter were partially offset by foreign-exchange losses arising from the depreciation of Indonesian rupiah against the US dollar.

First Resources said its financial position “remains strong”, with a gross gearing ratio at 0.52 times and cash and bank balances of US$367.6 million, an increase from US$292.2 million as at Dec 31, 2025.

The group’s available undrawn committed credit facilities stood at US$173.5 million, which may be used for general corporate purposes.

Shares of First Resources rose 2.4 per cent or S$0.09 to close at S$3.90 on Friday, after the release of the results.