Golden Agri-Resources swings to black in H1 2021 on palm product output recovery

PALM oil plantation company Golden Agri-Resources E5H reversed into the black in the first half of 2021 from a year ago, thanks to boosts in revenue from its plantations and palm oil mills segment, the company said on Friday.

Net profit for the six months ended June 30 stood at US$153 million, reversing from a net loss of US$157 million posted in the same period a year ago.

The results translate to earnings per share of 1.21 US cents, against loss per share of 1.23 US cents.

Revenue was up 31.4 per cent to US$4.45 billion, in line with increasing international crude palm oil prices globally. Consequently, earnings before interest, taxes, depreciation and amortisation surged 176.2 per cent to US$522.7 million in H1 2021, compared with the year-ago period.

The company explained also that its revenue from its plantations and palm oil mills segment increased 66.9 per cent to US$1.04 billion in H1 2021, mainly driven by higher crude palm oil prices - the average international crude palm oil price per tonne in the period of assessment was 76.6 per cent higher at US$1,088 per tonne versus US$616 per tonne in the year-ago period.

This figure didn't surge as much in Indonesia, however, which adopted an export tax and levy scheme at end-2020, with the net crude palm oil price going up just 29.2 per cent to US$722 per tonne versus US$559 in the year-ago period.

Commenting on Golden Agri's results, chairman and chief executive Franky Widjaja said the company's financial position is healthier thanks to its stronger performance in H1, leading to lower leverage and a strengthed liquidity position.

On the industry outlook, Mr Widjaja said weather uncertainties in some producing countries have resulted in "very tight" global vegetable oil supply. In particular, palm oil production recovery is also weaker than expected. This was primarily due to Malaysia's foreign labour shortage, which is expected to continue till late this year.

"Global demand, on the other hand, has been very encouraging and palm oil exports will continue to be strong in line with the improving market conditions in major consuming countries," he said. "We remain positive while staying prudent by closely monitoring industry supply and demand dynamics to be able to benefit from any prospective developments."

The board has proposed an interim dividend of 0.528 US cent per share, payable on Nov 30, 2021.

Shares of Golden Agri-Resources closed flat at 23.5 Singapore cents on Thursday.

READ MORE:

• Golden Agri rides on demand spike, stronger prices for palm oil
• Golden Agri swings into the black with Q1 net profit of US$41m
• Higher palm oil prices offset lower production output for Golden Agri