Golden Agri-Resources posts higher Q1 profit on 32% revenue growth

GOLDEN Agri-Resources on Thursday (May 12) reported net profit of US$188 million for the first quarter ended Mar 31, 2022, rising nearly fivefold from the previous year’s Q1 net profit of US$41 million.

The mainboard-listed palm oil company said it achieved record Q1 performance on the back of a 32 per cent year-on-year increase in revenue to US$2.7 billion, from US$2.05 billion the year before as crude palm oil (CPO) market prices continued to appreciate.

CPO market prices (FOB Belawan) notably increased by 49 per cent compared to the same quarter last year, averaging US$1,579 per tonne.

At the upstream, the strengthening of CPO prices more than offset the decrease in plantation output, which fell 18 per cent to 668,000 metric tonnes (MT) from 812,000 MT the previous year.

Fruit yield for Q1 decreased by 21 per cent to 4.2 tonnes per hectare (ha), from Q1 FY2021’s high base of production that experienced a rebound after the El Nino. Production in the latest quarter was also impacted by high rainfalls and old estates being prepared for replanting.

The downstream business’ Q1 sales volume declined 2 per cent on-year to 2.2 million MT from 2.3 million MT the previous year, affected by lower feedstock availability in the market. Golden Agri-Resources however noted that the downstream business continued to deliver a healthy margin this quarter.

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As at Mar 31, 2022 the group’s planted area stood at 537,000 ha, comprising 511,000 ha of mature estates and 26,000 ha of immature estates.

In its outlook, Golden Agri-Resources : E5H 0% said global oilseed production growth is predicted to remain limited with palm oil production estimated to grow at a single digit pace this year.

The group said it fully supports the Indonesian government’s temporary export ban to tackle food inflation in the country, particularly its policy to ensure an adequate domestic supply of cooking oil at affordable prices.

“We believe that our well-established vertically integrated business model provides us with the flexibility to adjust our operations to adapt with the evolving industry changes, including optimising our facilities, logistic capability and product portfolio,” said the group.

“However, the current uncertainties remain due to the ongoing geopolitical conflicts, new variants of Covid-19 and global supply chain issues which may affect our operations,” it added.

Shares of Golden Agri-Resources closed Wednesday S$0.005 or 1.8 per cent higher at S$0.29.