First Resources net profit drops by more than 60%
Higher export taxes in Indonesia stabbed at the palm oil producer’s profits.
First Resources Limited saw a significant drop in their net profit for the first quarter of 2021.
In a disclosure to the Singapore Exchange, the palm oil producer reported a net profit of US$8.8m for the first quarter, a hefty 60.5% drop from the US$22.2m recorded for the same period last year.
This is despite a 40.3% increase in sales to US$196.9m in the first quarter of 2021, from the Us$140.4m recorded last year.
First Resources attributed its losses to a new levy structure implemented in Indonesia in December.
“Under the new levy structure, the levy payable by exporters for every tonne of crude palm oil (CPO) exported was increased from a flat rate of US$55 per tonne to a progressive system wherein the levy increases by US$15 per tonne for every US$25 per tonne of increase in market CPO price. The export levy amounts also vary depending on product type, with that for processed products lower than that for CPO,” First Resources explained.
The company expects its output to grow in the coming months, while expecting subdued results for the first half due to higher export levies.