Indofood Agri Resources reported Tuesday a first quarter net loss of 57.78 billion rupiah (S$5.55 million), swinging from a year-ago net profit of 49.80 billion rupiah, as commodity prices fell.
“The ongoing economic uncertainties arising from U.S.-China trade tensions is putting a lot of price pressure on agricultural commodities,” the company said. “Lower commodity prices continued to affect the performance of the group’s oil palm plantation and the Brazilian sugar operations.”
It noted CPO prices CIF Rotterdam fell 19 percent in the first quarter to an average of US$547 a tonne, compared with US$674 in the year-ago quarter.
Revenue for the quarter ended 31 March was 3.36 trillion rupiah, up 5.3 percent on-year, mainly on strong sales in the edible oils and fats (EOF) division, the palm oil company said in a filing to SGX before the market open.
In addition, the company posted a loss of 12 billion rupiah from the share of results of associate companies, widening from a 6 billion rupiah loss in the year-ago quarter due to a larger loss from FPNRL, which operates a sugar business in the Philippines.
The joint venture share of loss from the Brazilian sugar operations was 36 billion rupiah in the quarter, wider than the 3 billion rupiah loss in the year-ago period, Indofood Agri said.
“The higher loss was mainly due to falling sugar and ethanol prices, and forex loss arising from the weakening of Brazilian real,” it said.
In its outlook, Indofood Agri said, “CPO prices will remain volatile with demand projected from key import markets like China and India, together with the relative price of crude oil which affects biodiesel demand.”
The company added that domestic palm oil demand would likely be affected by the roll out of new biodiesel blending regulations this year.