Golden Agri H2 net profit down 21.5% to US$188.6m

GOLDEN Agri-Resources on Thursday posted a net profit of US$188.6 million (S$248.4 million) for the second half of the fiscal year ended December 2020, down 21.5 per cent from US$240.4 million in the corresponding year-ago period.

This brought the integrated palm oil producer's FY 2020 net profit to US$31.8 million, versus a profit of US$194 million in FY 2019. To recap, Golden Agri had posted a net loss of US$156.9 million in H1 FY 2020.

The firm's earnings before interest, tax, depreciation and amortisation (Ebitda) for the second half of the year fell 3.8 per cent year on year (yoy) to US$479.8 million from US$498.8 million.

Revenue for H2 rose 12.9 per cent to US$3.69 billion from US$3.27 billion in the corresponding period last year, due primarily to higher crude palm oil (CPO) prices. For the full year, the group's revenue increased by 10 per cent to US$7.08 billion.

Golden Agri noted that last year, the average international CPO (FOB Belawan) price averaged at US$691 per tonne, some 32 per cent higher than the previous year.

As a result, the group's upstream business benefited from the higher market prices in the second half of the fiscal year. Its downstream business improved in line with the logistics recovery that followed Covid-19 lockdowns in major consuming countries.

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In FY 2020, revenue from the plantations and palm-oil mills segment rose 12 per cent y o y, while revenue from the palm, laurics and others segment gained 10.4 per cent.

Despite the lift in topline figures, the group said its Ebitda and net profit figures were mainly affected by a combination of foreign-exchange losses, and lower fair-value gain on financial assets in the fiscal year.

Cost of sales for H2 rose 5.3 per cent to US$2.93 billion from US$2.78 billion last year, while gross profit for the period rose 56.4 per cent to US$761.5 million.

Golden Agri's board of directors has proposed a final dividend of 0.48 Singapore cent per ordinary share for FY 2020, compared to a final dividend of 0.58 cent in FY 2019.

The proposed dividend is payable to shareholders on May 18, and is subject to shareholder approval at the annual meeting to be held on April 28.

In its outlook statement, Golden Agri said the outlook of CPO prices remains stable due to the current low stock position globally, and production is expected to grow after a decline in 2020.

Said Golden Agri's chief executive Franky Widjaja: "In the second half of the year, global economies started to open, with CPO market prices strongly rebounding, supported by extreme tightness in global vegetable oil supply and demand.

"Demand is expected to remain strong with recovery from the Covid-19 pandemic, including the demand from Indonesian biodiesel. However, we still need to anticipate volatility with the lingering Covid-19 pandemic."

Shares in Golden Agri closed at 19.3 Singapore cents on Thursday before the announcement of the results, up 1.6 per cent or 0.3 cent.