INDONESIA palm oil producer First Resources : EB5 0% posted a net profit of US$73.6 million for its first quarter ended Mar 31, 2022, jumping by 738.5 per cent from the US$8.8 million it recorded a year earlier.

Sales increased 54.1 per cent to US$303.5 million, from US$196.9 million a year ago.

The growth was mainly driven by stronger average selling prices achieved in the quarter as compared to that in the same period in 2021, despite a decline in sales volumes, the company said on Friday (May 13).

It noted that overall sales volumes were hit by a net inventory build-up in the quarter, as compared to a net drawdown in the corresponding year-ago period, as well as a dip in production volumes and yields.

In the quarter, the company harvested 752,927 tonnes of fresh fruit bunches, 5.6 per cent lower than the 797,432 tonnes a year ago.

Production of crude palm oil also fell 9.4 per cent to 192,667 tonnes, from 212,564 tonnes a year earlier, while production of palm kernel was down 7.7 per cent to 43,335 tonnes, from 46,971 tonnes a year ago.

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First Resources said it saw challenges arising from changes in Indonesian government policies to address domestic cooking oil shortages and inflation, on top of supply disruptions from the Russia-Ukraine conflict.

Indonesia in April started a complete ban on palm oil exports, after it switched between tightening export volumes and raising export levies since January, to ensure local supply and lower domestic prices of cooking oil.

Although the company noted that the ban is temporary and will be evaluated periodically, it expects the length of the export ban will also have an impact on the upcoming results of its operations.

Shares of First Resources closed S$0.02 or 0.9 per cent lower at S$2.10 on Thursday.