Golden Agri’s H2 profit soars about 17 times to US$262.1 million on higher palm oil prices, sales 

PALM oil producer Golden Agri-Resources ’ net profit for its second half ended Dec 31 surged to US$262.1 million from US$15.3 million in H2 FY2023, on the back of higher crude palm oil (CPO) prices and sales volumes.

A turnaround on foreign exchange to a positive US$84.6 million from a net loss of US$24 million also contributed to the earnings recovery, based on the group’s financials released on Thursday (Feb 27).

Its earnings per share (EPS) for H2 FY2024 stood at US$0.0207, up from an EPS of US$0.0012 in the previous corresponding period. Revenue for the half year climbed 18.2 per cent on the year to US$5.8 billion from US$4.9 billion.

Its board proposed a final dividend of S$0.00804 per share, compared with a final dividend of S$0.00613 per share in the year-ago period. It will be paid out on May 20 after the record date on May 9, upon shareholders’ approval at the upcoming Apr 25 annual general meeting. 

Earnings before interest, taxes, depreciation and amortisation for H2 was up 19.5 per cent at US$606.8 million from US$508 million previously, and 11.8 per cent higher for the full year at US$1.1 billion versus US$985.6 million in FY2023. 

For the full year, the group reported a net profit of US$364.6 million, up 84.5 per cent from US$197.6 million year on year. This translated to an EPS of US$0.0287 for FY2024 versus an EPS of US$0.0156 for FY2023. Revenue climbed 11.8 per cent to US$10.9 billion from US$9.8 billion previously, on a record sales volume of 11.9 million tonnes in 2024.

Richard Fung, director of investor relations of the group, said in a results briefing: “The average CPO price last year increased by 12 per cent to US$1,005 dollars per tonne, which, together with the increased sales volume, was able to offset the weaker palm product output that was lower by 7 per cent compared to the previous year.” He noted that the weakness in palm production was led by replanting activities as well as El Nino conditions experienced in 2023. The growth was driven primarily by higher CPO prices during the year and higher production output in the second half, the company said. 

Golden Agri chairman and chief executive Franky Widjaja said: “Strong palm oil prices have persisted at the start of 2025, maintaining a premium over soybean oil. This trend will hold during the current low production season, while festive periods across Asia will drive consumption demand.” 

He pointed out that palm oil output is set to recover this year, especially in Indonesia, upon emergence from the long-tail impact of El Nino weather conditions. “This supply growth will be readily absorbed by sustained growth in demand supported by Indonesia’s higher B40 biodiesel blending mandate. We remain vigilant to the impact of geopolitical and global economic conditions on palm oil prices,” he noted. 

Looming EUDR

On the EU Deforestation Regulation (EUDR), director of sustainable supply and production Ian Suwarganda noted that Golden Agri is working with its customers to prepare for compliance.

EUDR requires agri-commodity companies wanting to sell to the European Union market to prove that their products are deforestation-free across traceability, deforestation risk assessment and legality risk assessment. The law has been delayed by a year and will be implemented at the end of 2025. 

Golden Agri launched its tracing system, integrating the company’s traceability data with the EU Traces platform to support operators’ due diligence statements, as well as a deforestation alert mechanism to assure its customers of deforestation-free products. However, clear directions on legality risk assessment are still lacking as neither EU nor company authority in EU member states had provided a checklist, noted Suwarganda. He added that the group has come up with its own checklist, benchmarked against public references, to comply with. “We’re confident in our communication with our customers, and hopefully also with competent authority in Europe so that they can accept our checklist.”

Shares of Golden Agri were trading 4.2 per cent or S$0.01 higher at S$0.25 as at the midday trading break on Thursday.