Golden Agri-Resources H1 loss widens to US$156.9m

PALM oil plantation owner Golden Agri-Resources plunged deeper into the red with a net loss of US$156.9 million for the first half of fiscal 2020 ended June, compared to a net loss of US$46.4 million for the year-ago period. 

This was due to a foreign exchange translation loss and deferred tax expense, the company said in a bourse filing on Friday morning. 

This translated into a loss per share of 1.23 US cents for H1, compared to a loss of 0.36 US cent a year ago. 

Revenue for the period increased by 7.1 per cent to US$3.39 billion from US$3.17 billion a year ago, due primarily to higher average selling prices. Crude palm oil (CPO) market prices averaged US$616 per tonne during the first half of 2020, some 24 per cent higher than the corresponding period last year. 

Golden Agri's upstream segment, which consists of its plantations and palm oil mills, reported a revenue increase of 8.9 per cent for H1, while its downstream segment, which comprises palm, laurics and others, saw revenue increase by 7.3 per cent. 

This was, however, partially offset by the Indonesian government's reinstatement of CPO export levy after it had granted an exemption to companies last year. 

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Although the Covid-19 pandemic continued to spread, the company's earnings before interest, taxes, depreciation and amortisation (Ebitda) improved by 24 per cent to US$105 million from US$84 million for Q1 on the back of a gradual recovery in demand and reduced supply chain disruptions. 

However, the improvement in Q2 was unable to lift Golden Agri's half year Ebitda, which fell 4.4 per cent to US$189.2 million from US$197.9 million last year. 

As at end-June, cash and cash equivalents stood at US$278.2 million. 

While Golden Agri acknowledges that the Covid-19 pandemic has created uncertainty and affected the global business sentiments and operating environment, it stresses that the outlook of CPO prices remains stable even though several factors have put pressure on supply growth in the first half of the year. 

These include industry replanting, drought conditions and lower fertiliser application by small industry players, which were also exacerbated by high rainfall experienced in some parts in Sumatra and Kalimantan. 

Franky Widjaja, Golden Agri's chairman and chief executive officer, said that supply for the rest of the year is expected to "remain tight" even as the industry moves into the high production season.

He added: "The global markets especially in key consuming countries have been recovering progressively as expected, while at the same time we saw strong commitment from the Indonesia government on its B30 mandate implementation."

Shares in Golden Agri closed 0.1 Singapore cent higher, or 0.6 per cent, at 15.7 Singapore cents on Thursday.