Bumitama Agri reported Tuesday its first quarter net profit dropped 52.3 percent to 110.61 billion rupiah (S$10.51 million or US$7.66 million) as crude palm oil (CPO) prices declined.
Revenue for the quarter ended 31 March fell 12.1 percent on-year to 1.68 trillion rupiah, the palm oil producer said in a filing to SGX before the market open.
That was due to the average selling price of CPO falling by 16.3 percent on-year to 6,555 rupiah per kilogram and palm kernal’s average selling price declining 38.3 percent on-year to 4,083 rupiah per kilogram, Bumitama Agri said.
“During the first quarter of 2019, the group recorded marginal growth in the palm product production compared to first quarter of prior year. However, the growth in production was negated by the downturn in the palm oil prices which had not recovered,” Bumitama Agri said in the filing.
Selling expense during the quarter jumped 84.3 percent on-year to 90.60 billion rupiah on higher sales volume and on additional barges rented to expedite loading and delivery of palm products to customers, the company said.
General and administrative expenses increased 11.0 percent on-year in the quarter to 97.08 billion rupiah, mainly on salary increases and employee benefits, it said.
In its outlook, Bumitama Agri was downbeat.
“High stock level of the palm oil industry has kept palm oil prices low. We do not foresee any changes in palm oil prices in the near future unless there are changes affecting supply and demand dynamics,” it said.
“The group anticipates improvement in its production volume to provide support and mitigate the impact of low palm oil prices. The group will continue to strengthen its business strategies, improve cost management and increase contribution from newly matured plantations,” it added.
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