- Resilient first quarter 2018 EBITDA1 of US$121 million despite lower palm product
output by 12 percent year-on-year to 612,000 tonnes
- Financial position remained healthy with adjusted net gearing ratio5 of 0.43 times
SINGAPORE, May 15, 2018 /PRNewswire/ --
FINANCIAL HIGHLIGHTS
US$'million
|
Three months ended
|
Change
|
Three months ended
|
Change
|
31 Mar 2018
(1Q 2018)
|
31 Mar 2017
(1Q 2017)
|
31 Dec 2017
(4Q 2017)
|
Revenue
|
1,816
|
2,046
|
-11%
|
1,923
|
-6%
|
Gross Profit
|
248
|
291
|
-15%
|
261
|
-5%
|
EBITDA1
|
121
|
183
|
-34%
|
156
|
-23%
|
Underlying Profit2
|
25
|
84
|
-70%
|
37
|
-34%
|
Net Profit/(Loss)3
|
12
|
38
|
-68%
|
-29
|
n.m
|
Earnings per Share4 (US$ cents)
|
0.09
|
0.29
|
-69%
|
-0.23
|
n.m
|
Golden Agri-Resources Ltd and its subsidiaries ("GAR" or the "Company") recorded a decline in revenue to US$1.8 billion for the first quarter 2018 corresponding to decreases in both palm production and CPO prices.
EBITDA1 reached US$121 million, while underlying profit2 also came in lower
at US$25 million.
Despite these lower results, GAR's financial position as at 31 March 2018 remained healthy with
adjusted net gearing ratio5 of 0.43 times. Total consolidated assets continued to expand to US$8.37 billion.
SEGMENTAL PERFORMANCE
Plantations and palm oil mills
Palm product output in the first quarter 2018 decreased both year-on-year and quarter-on-quarter by 12 percent and 6 percent,
respectively, to approximately 612,000 tonnes. The lower year-on-year production was attributable to unusually high production
last year in relation to the recovery from El Nino phenomenon in 2015, while the
quarter-on-quarter decline was due to seasonality. Furthermore, several estates in southern part of Kalimantan and Sumatra are still impacted by the prolonged drought
condition. Coupled with lower CPO prices, EBITDA1 for the quarter was weaker at US$95
million. However, the margin remained resilient at 28 percent.
As per 31 March 2018, GAR's planted area stood at 500,345 hectares, of which 21 percent belongs
to plasma smallholders. The harvested area of 478,388 hectares yielded an average of 4.4 tonnes per hectare for the current
quarter. The productivity of older estates (above 25 years age) continues to be high, with an average yield of 4.5 tonnes of
fruits per hectare. The younger estates and replanting use a new generation of seeds that are higher yielding to sustain
long-term production growth.
Palm and laurics
The downstream business continues to focus on enhancing integration and pushing higher value added products. However, recent
governments' intervention in commodity markets, specifically in Malaysia and India, resulted in margin compression for palm and laurics segment in the first quarter. EBITDA1
reached US$25 million with a margin of 1.6 percent.
Oilseeds and Others
The oilseed and food business in China continued its positive contribution to the Company's
EBITDA amidst the competitive market environment. The segments reached a combined EBITDA1 of US$2.8 million during the first quarter 2018. Main contribution came from the oilseeds segment, which achieved
a stronger EBITDA1 margin of 1.6 percent. The divestment of the Tianjin plant was
also completed in April 2018.
OUTLOOK AND STRATEGY
Mr. Franky Widjaja, GAR Chairman and Chief Executive Officer commented: "First quarter 2018 was
a challenging period for the palm oil industry. Industry experts are also concerned about a production surplus in the second half
of the year, due to seasonality and low production in the first quarter. However, we believe CPO prices will be supported by
growing food demand as well as from increasing biodiesel usage. Over the long term, we believe demand for palm oil will remain
strong, and the industry is well positioned to ride out occasional periods of volatility."
Mr. Widjaja further explained: "GAR will continue to focus on two main activities: leveraging technology to drive operational
transformation and achieve leadership in productivity and cost efficiency; and focusing on delivering responsibly produced,
value-added palm oil products that meet customer needs. We believe this combination and our integrated business value chain will
result in responsible growth of the Company and long-term shareholders return."
About Golden Agri-Resources Ltd (GAR)
GAR is one of the leading palm oil plantation companies with a total planted area of 500,345 hectares (including plasma
smallholders) as at 31 March 2018, located in Indonesia. It has integrated operations
focused on the production of palm-based edible oil and fat.
Founded in 1996, GAR was listed on the Singapore Exchange in 1999 and has a market capitalisation of US$3.4 billion as at 31 March 2018. Flambo International Limited, an investment
company, is currently GAR's largest shareholder, with a 50.35 percent stake. GAR has several subsidiaries, including PT SMART Tbk
which was listed on the Indonesia Stock Exchange in 1992.
GAR is focused on responsible palm oil production. In Indonesia, its primary activities
include cultivating and harvesting of oil palm trees; processing of fresh fruit bunch into crude palm oil (CPO) and palm kernel;
refining CPO into value-added products such as cooking oil, margarine, shortening, biodiesel and oleo-chemicals; as well as
merchandising palm products throughout the world. It also has operations in China and
India including a deep-sea port, oilseeds crushing plants, production capabilities for refined
edible oil products as well as other food products such as noodles.
For media enquiries, please contact:
Lim Shu Ling
Mobile: +65 8233 9438
Email: shuling.lim@goldenagri.com.sg
1
|
Earnings before tax, non-controlling interests, interest on borrowings,
depreciation and amortisation, net gain or loss from changes in fair value of biological assets, and foreign exchange
gain or loss.
|
2
|
Net profit attributable to owners of the Company, excluding net effect
of net gain or loss from changes in fair value of biological assets, depreciation of bearer plants, exceptional items and
other non-operating items (foreign exchange gain or loss and deferred tax income or expense).
|
3
|
Net profit or loss attributable to owners of the Company.
|
4
|
Earnings per share is net profit attributable to owners of the Company
divided by weighted average number of shares.
|
5
|
Adjusted net debt (interest bearing debts less cash and short-term
investments as well as liquid working capital) divided by equity attributable to owners of the Company.
|
SOURCE Golden Agri-Resources Ltd (GAR)