Update: Golden Agri-Resources reports 2Q18 loss of $39 million amid lower CPO prices

Golden Agri-Resources on Tuesday reported a second quarter net loss of US$39 million, swinging from a year-earlier net profit of US$22 million amid softer crude palm oil (CPO) prices.

Revenue for the quarter ended 30 June was US$1.86 billion, up 6 percent on-year from US$1.757 billion a year earlier, it said in a filing to SGX before the market open on Tuesday.

The foreign exchange loss in the quarter was US$22.21 million, swinging from a year-earlier foreign exchange gain on US$4.86 million, Golden Agri said.

For the first half, it reported a net loss of US$27 million, swinging from a year-earlier profit of US$59 million, while revenue fell 3 percent on-year in the first half to US$3.68 billion, it said.

“The operating performance of the group was affected by lower production output and softer crude palm oil (CPO) prices during the current period,” Golden Agri said.

Revenue from the plantation and palm oil mills segment fell by 18.9 percent on-year in the first half to US$684.2 million, mainly on decreases in production yield and CPO prices as well as higher inventory levels, Golden-Agri Resources said.

Fresh fruit bunches (FFB) fell to 4.598 million tonnes in the first half from 4.695 million tonnes in the year-earlier period, while palm product output fell to 1.318 million tonnes in the first half from 1.335 million tonnes in the year-ago period, Golden Agri-Resources said, attributing it to the biological slowdown, or tree stress, after high production in 2017 following the recovery from El Nino weather conditions.

The average international CPO (FOB Belawan) price for the first half fell to US$632 per tonne, compared with US$702 per tonne in the year earlier period, leading to earnings before interest, tax, depreciation and amortization, or ebitda, from the plantations and palm oil mills segment falling 19.1 percent on-year to US$197.2 million in the first half, it said.

Revenue in the palm and laurics segment slipped slightly to US$3.31 billion in the first half on lower average net realized prices, it said.

“CPO market prices were affected by the recent governments’ intervention in commodity markets, such as in India and Malaysia, as well as the changes in U.S.-China trade tariffs, coupled with untimely purchase of feedstocks for the festive season stock building,” it said.

The company said that capital spending in upstream projects is planned at US$110 million in 2018, with the same amount for downstream projects as it forecast crude palm oil prices to remain supported by global demand growth in 2018.

Revenue from the oilseeds segment decreased by 31.5 percent on-year to US$242.5 million in the first half, mainly due to lower sales
and crushing volume, it said, adding the segment’s earnings were also impacted by uncertainty over U.S.-China trade policy.

This article was originally published on Tuesday, 14 August 2018 at 7:56 A.M. SGT; it has since been updated. 

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