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IndoAgri Q3 profit plunges 91.3% to 8.74b rupiah on weak commodity prices

MAINBOARD-LISTED Indofood Agri Resources (IndoAgri) reported a 91.3 per cent dive in its third fiscal quarter earnings to 8.74 billion rupiah (S$793,264), with the agribusiness attributing the fall to poor performance in sales and profit in its plantation division arising from weak commodity prices and increase in crude palm oil (CPO) stock.

The decline was partially offset by a stronger Q3 showing at its Edible Oils and Fats (EOF) division.

Revenue was mostly flat, inching up 0.6 per cent to 3.71 trillion rupiah from the 3.68 trillion rupiah in the year-ago period.

IndoAgri's plantation division's sales declined 11 per cent for Q3 due to lower average selling prices of agriculture crops, and lower sales volume of CPO and palm kernel (PK) related products arising from timing in shipment.

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Its EOF division, meanwhile, reported a 24 per cent increase in sales over Q3 last year from higher sales volume of edible oil products.

Earnings per share tumbled to 6.3 rupiah from 72 rupiah for the the previous corresponding period. No dividend was reported for the period.

IndoAgri noted that despite uncertainties surrounding commodities in the wake of US-China trade tensions, its operations "continue to be supported by a positive domestic economic outlook and large domestic palm consumption".

"The domestic palm demand is expected to be further supported by the roll-out of B20 (20 per cent) biodiesel blending in September 2018 to both Public Service Obligation (PSO) and non-PSO sector, and the Indonesian government's intention to accelerate the implementation of B30 biodiesel programme in 2019," IndoAgri said in its earnings statement.

"The group will continue to strengthen the fundamentals and improve margins through better yielding crops, cost efficiencies and other innovations to improve productivity."

IndoAgri ended at 20.5 Singapore cents on Tuesday, down 2.38 per cent.