PALM oil company Golden Agri-Resources (GAR) : E5H 0% posted a 25 per cent decline in net profit for the third quarter ended Sep 30, 2023, to US$68 million from US$90 million in the same period a year earlier.

Revenue in Q3 2023 rose 5 per cent to US$2.5 billion, from US$2.3 billion in Q3 2022.

In a business update on Tuesday (Nov 14), the company said its results remained firm, notwithstanding a normalisation in the price of crude palm oil (CPO) after it hit a record high in 2022.

GAR noted that the average CPO market price for the nine months ended Sep 30, 2023, stood at US$922 per tonne, down 33 per cent from last year’s high of US$1,368 per tonne.

The company’s revenue for the nine-month period fell 15 per cent year on year to US$7.3 billion. Lower average selling prices were partially offset by expanded sales volumes, it noted. Net profit for the same period fell 63 per cent to US$250 million.

“Our downstream business continues to perform well with contributions from value-added products to our overall performance and reducing the impact from industry volatility,” GAR said. “The increasing downstream sales volume has helped compensate for the decline in CPO price that impacted our plantation business.”

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It added that it is “(remaining) vigilant” amid the current El Nino dry season in Indonesia, and is “proactively monitoring and responding to fire outbreaks”.

As concerns about adverse weather conditions grow, the company expects global vegetable oil supplies to remain tight. The upcoming festive season and strong biodiesel demand are also expected to support vegetable oil consumption, it said.

GAR shares closed up 1.9 per cent or S$0.005 at S$0.27 on Tuesday, before the business update was released.