Indofood Agri reports 2Q19 net loss widened as palm oil prices fell

Palm kernels at a plantation in IndonesiaPalm kernels at a plantation in Indonesia

Indofood Agri reported Wednesday its second quarter net loss widened to 216.54 billion Indonesian rupiah (S$21.19 million or US$15.44 million) from 68.60 billion rupiah in the year-ago period on lower selling prices for palm products.

Revenue for the quarter ended 30 June was 3.14 trillion rupiah, down 6.6 percent on-year, the palm oil producer said in a filing to SGX.

“The ongoing U.S.-China trade tensions continue to affect the global trade flows and economic growth. These uncertain global developments have negatively impacted the prices of agricultural commodities,” Indofood Agri said.

The plantation division’s revenue fell 19 percent on-year to 1.64 trillion rupiah on lower selling prices of palm products and lower sales volume of crude palm oil (CPO), the filing said. Earnings before interest, tax, depreciation and amortization (EBITDA) for the division tumbled 80 percent on-year to 89 billion rupiah, the filing said.

Offsetting the decline, the edible oils & fats (EOF) division posted higher sales volume of edible oils and fats products and higher profitability for the quarter, the filing said. EOF sales fell 5 percent on-year to 2.54 billion rupiah, while the segment’s EBITDA rose 19 percent on-year to 91 billion rupiah, the filing said.

Rotterdam CIF CPO prices fell 11 percent to an average US$533 a tonne in the first half from US$601 a tonne in 2018, the company 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,” Indofood Agri said.

Selling and distribution expenses for the quarter rose 16.6 percent on-year to 143.48 billion rupiah, general and administrative expenses increased 3.8 percent on-year to 236.35 billion rupiah and other operating expenses jumped 99.5 percent on-year to 37.92 billion rupiah, the filing said.

For the first half, Indofood Agri reported a wider net loss of 274.33 billion rupiah, compared with a net loss of 18.80 billion rupiah in the year-ago period, on revenue of 6.50 trillion rupiah, down 0.8 percent on-year.

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