First Resources H1 net profit falls 16.7% to US$32.6m on higher export taxes
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PALM oil producer First Resources EB5 on Friday announced a 16.7 per cent drop in net profit to US$32.6 million for the six months ended June 30, from US$39.1 million a year ago.
Earnings per share fell to 2.06 US cents in H1, from 2.47 cents in the year-ago period.
This was mainly due to the impact of higher export taxes from the progressive export levy structure implemented in Indonesia since December 2020.
The decline came despite a 48.4 per cent surge in sales to US$412.9 million, driven by higher average selling prices as well as stronger production and sales volumes.
Fresh fruit bunches harvested increased by 11.3 per cent, while crude palm oil production volumes rose by 15.4 per cent.
Gross profit was 51.9 per cent higher at US$173.3 million for the first half, with gross profit margin edging up one percentage point to 42 per cent.
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"Palm oil prices had been volatile during the first half of the year, driven by price movements in the rest of the vegetable oil complex and expectations of impending changes to the export levy structure in Indonesia," said Ciliandra Fangiono, CEO of First Resources, in a bourse filing on Friday morning.
The company noted that, effective July 2, Indonesia has reduced its export levies for palm oil products. It said this would help to reduce the export tax burden for exporters in the second half of the year.
"Looking ahead, palm's attractive relative pricing against competing edible oils is expected to lend support to prices whilst the lower export levy in Indonesia will help to reduce the export tax burden for exporters in the second half of the year," he added.
The company has declared a higher interim dividend of 1.25 Singapore cents, to be paid out on Sept 9. This is higher than the interim dividend of one cent in the corresponding period a year ago.
Shares of First Resources closed 0.7 per cent or S$0.01 lower at S$1.40 on Friday, after the results were released.
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