GOLDEN Agri-Resources E5H : E5H 0% reversed into the black for its third quarter ended Sep 30, with net profit at US$115 million, compared to a net loss of US$5 million a year ago.

In a business update on Friday (Nov 12), the palm oil plantation company said this was due to higher average selling prices and an increase in sales volume.

Its Q3 revenue was up 76 per cent to US$2.83 billion, from US$1.61 billion a year ago.

The company noted that a sustained increase in palm oil prices resulted in a 145 per cent increase in its earnings before interest, tax, depreciation and amortisation (Ebitda) for Q3, to US$305 million from US$124 million a year ago.

Meanwhile, Q3 palm product output was up 5 per cent on year to 697,000 tonnes, while downstream sales volume grew 12 per cent on year to 2.8 million tonnes.

For the 9-month period, revenue was up 46 per cent to US$7.28 billion from US$5 billion, largely due to continued strong production and palm oil market prices.

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Net profit for the first 9 months of 2021 was at US$268 million, reversing from a net loss of US$162 million in the same period in 2020.

It also logged a record 9-month period Ebita of US$828 million, up 164 per cent from US$314 million a year ago.

Its plantations and palm oil mills segment had gained from a higher plantation output and continuing uptrend in crude palm oil (CPO) market prices.

Nine-month palm product output was up 22 per cent at 2.3 million tonnes, while the downstream sales volume for the period was up 2 per cent on year at 7.6 million tonnes.

CPO market prices (FOB Belawan) increased by 74 per cent in the first 9 months of 2021 from a year ago to average at US$1,110 per tonne. After accounting for export tax and levy, the average net CPO price was US$765 per tonne, up 31 per cent from last year.

The company said industry prospects continue to be positive amid a growing global vegetable oil demand, with palm oil using up to 7 times less land to produce the same amount of oil compared to other vegetable oils.

It expects CPO market prices will remain strong on the back of tight global vegetable oil supply and weather conditions that may impact production - such as the extreme rainfalls in South-east Asia and drought in South America and the US.

It, however, would remain cautious of any uncertainties from the Covid-19 pandemic.

Shares of Golden Agri closed at S$0.27 on Friday (Nov 12), up S$0.005 or 1.9 per cent.

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