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Indofood Agri Resources sinks into red with Q1 net loss of 57.79b rupiah

INDOFOOD Agri Resources posted a net loss of 57.79 billion rupiah (S$5.5 million) for the first quarter ended March 31, 2019, from a net profit of 49.80 billion rupiah in the year-ago period.

This was mainly due to lower results from operations and higher financial expenses, the mainboard-listed agribusiness group said on Tuesday morning in a regulatory filing before the market opened.

Loss per share was 41.4 rupiah against earnings per share of 36 rupiah for the year-ago quarter. No dividend was declared, unchanged from a year ago. Shares in the company closed flat at S$0.280 on Monday.

Net asset value for the group stood at 8,385 rupiah per share, down marginally from 8,444 rupiah the year before.

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Revenue for the first quarter rose 5.3 per cent to 3.36 trillion rupiah, from 3.19 trillion a year ago. This was due to “strong sales contribution” from the edible oils and fats division.

Indofood Agri’s plantation division revenue was flat compared with the previous year, where lower average selling prices of palm products were offset by higher sales volume of palm products and sugar.

Lower commodity prices continued to affect the group’s oil palm plantation and Brazilian sugar performance. It said crude palm oil (CPO) prices CIF Rotterdam in the first quarter declined 19 per cent to an average of US$547 per tonne, from US$674 per tonne a year ago.

The group saw a 33 per cent increase in financial expenses to 210.25 billion rupiah from 158.10 billion rupiah a year ago, mainly due to higher working capital facilities and higher blended interest rate.

Looking ahead, the group said the ongoing economic uncertainties arising from US-China trade tensions is “putting a lot of price pressure” on agricultural commodities.

CPO prices are expected to remain volatile with demand projected from key import markets like China and India, along with the relative price of crude oil which affects biodiesel demand.

Domestic palm demand is also expected to be affected by the roll-out of B20 (20%) biodiesel blending in September 2018 to both the Public Service Obligation (PSO) and non-PSO sector.

This is in view of the Indonesian government’s intention to accelerate the implementation of B30 biodiesel program in 2019, Indofood Agri said.