Halcyon Agri Q1 revenue up 18.9% on higher sales, average selling prices

REVENUE for Halcyon Agri : 5VJ 0% climbed 18.9 per cent to US$617.3 million in Q1 on the back of higher sales volume and higher average selling prices, the mainboard-listed company said in a business update on Friday (May 20).

The group’s earnings before interest, taxes, depreciation and amortisation (Ebita) rose to US$15.1 million in Q1, up around 5.6 per cent from the year ago period.

Gross profit margins went up by 20.8 per cent to US$47 million in Q1, from US$38.9 million previously.

Sales volume grew to 306,733 tonnes in the first quarter, up 5.2 per cent year on year.

The natural rubber supplier said that it recorded broad-based improvement across all its business segments, driven by higher sales volume and better unit margins.

“These are testament to our ability to capture market demand and enhance cost efficiencies effectively,” it added.

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While the group’s upstream business unit Corrie MacColl Plantations made an operating loss in the first quarter due to the low yielding wintering seasons, the company expects the unit to improve in the coming quarters.

It has also begun tapping 2,500 ha of new plantation areas. “The progressive opening of new areas will contribute to increased production of 2,000 metric tonnes per annum in the initial year and will ramp up as the trees continue to grow,” said the group.

While the group is anticipating more headwinds in 2022 arising from geopolitical and inflation risks, Li Xuetao, Halcyon Agri’s chief executive officer, noted that demand for natural rubber remains sturdy.

“The expected ramping up of global mobility will also boost the usage of tyres and natural rubber,” he added.

Li noted that the volatility in rubber prices does not reflect the actual cost of production of natural rubber. “In the face of tightening supply, immediate collective action is warranted from the whole natural rubber industry.”

“The group maintains its view that the mid- to long-term supply and demand dynamics of natural rubber remain favourable, and will support its prices,” said Li.

It will continue to work closely with customers to navigate ongoing challenges, while maintaining a “tight and effective risk management framework”.

Shares of Halcyon Agri closed flat at S$0.230 on Friday before the announcement.