Global Palm Resources posts 1H21 swings to net profit as palm oil prices rise

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

Global Palm Resources reported Monday its first half swung to a net profit of 41.9 billion rupiah, from a year-earlier net loss of 4.5 billion rupiah as revenue increased on higher crude palm oil (CPO) and palm kernel average selling prices and sales volume.

Revenue for the January-to-June period increased 79 percent on-year to 248 billion rupiah, the palm oil producer said in a filing to SGX.

The average selling price of CPO rose 26 percent on-year to 9,903 rupiah a kilogram in the first half, compared with 7,849 rupiah a kg in the year-ago period, Global Palm said. The average selling price of palm kernel increased 51 percent on-year in the first half to 6,624 a kg, the filing said.

Sales volume of CPO increased 25 percent on-year to 20,010 tonnes, while palm kernel sales volume rose 4 percent on-year in the first half to 3,013 tonnes, the filing said.

Global Palm issued a cautious outlook for CPO.

“CPO prices are expected to remain volatile considering the fear and uncertainty in the world economy due to the Covid-19 virus. Nonetheless, the short-term price outlook for CPO remains stable on the back of lower palm oil output expectations for end 2021 and fairly robust demand for CPO,” Global Palm said.

“We are continuing to replant older palm trees with newer breeds of high yield palm trees. Our ongoing replanting scheme will ensure long term sustainability for the group. These efforts, together with other measures the management is taking to improve productivity and reduce costs, should result in a positive sustainable future for the group,” the company added.

Global Palm’s plantations are in West Kalimantan, East Kalimantan and Central Sulawesi in Indonesia.