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Golden Agri back in the black with Q3 profit on lower expenses, other income
PALM oil plantation owner Golden Agri-Resources (GAR) on Thursday posted a third-quarter net profit of US$801,000, reversing from a loss of US$53.9 million in the year-ago period, as lower expenses and other income gave a boost to its bottom line.
Earnings per share for the quarter came in at 0.01 US cent, from a loss per share of 0.42 US cent last year.
No dividend was declared.
Revenue for the three months to Sept 30 slipped 15 per cent to US$1.56 billion, from US$1.84 billion a year earlier.
But total operating expenses was 22.5 per cent lower at US$174.8 million, while the company booked other income of US$545,000 compared to an other loss of US$61.8 million in the year-ago quarter.
For the nine months ended Sept 30, the group's performance was affected by weaker crude palm oil (CPO) prices.
"During this period of lower prices, the downstream business managed to increase its contribution to the consolidated Ebitda (earnings before interest, tax, depreciation and amortisation)," the company said.
Comparing the group's performance from the previous quarter, Franky O Widjaja, GAR chairman and chief executive said: "Third quarter saw positive turnaround both in production and prices, resulting in an increased contribution from our upstream business to GAR's overall performance."
The group expects this positive trend in CPO prices to continue in the fourth quarter this year and beyond.
"On the supply side, production growth will still be slow in 2020 as impacted by the very dry conditions in 2019... We also see demand from large consuming countries, such as China and India, continue to be strong," the company said.
GAR added that it remains positive on the long-term prospects of the industry, on the back of the "resilient supply and demand fundamentals of palm oil".
The counter closed at 26.5 Singapore cents on Wednesday, up 1.9 per cent, or 0.5 cent.