It was hit by lower production output and softer crude palm oil prices.
Golden Agri Resources' (GAR) profit for the first quarter of 2018 slumped 68.4% in a year from US$37.55m to US$11.85m. Revenue also fell by 11.3% from US$2.05b to US$1.82b.
"The operating performance of the Group was affected by lower production output and softer crude palm oil (CPO) prices during the current period," the company said in its financial statement.
Earnings from its plantation and palm oil mills fell 32.6% from US$140.72m to $94.83m mainly attributable to decreases in production yield and CPO prices during the current period.
Fresh fruit bunch (FFB) and total palm product dipped 13.23% to 2,125,000 tonnes and 12.07% to 612,000 tonnes, respectively.
"The production yield was lower in the current period due to the tree-stress effect after the high production in 2017 following the recovery from El Nino weather condition," the company said.
The average international CPO (FOB Belawan) price for the current period was US$645 per tonne as compared to US$734 per tonne last year.
Palm and laurics profit crashed 35.1% to US$25.32m due to lower sales volume and lower average net realised prices.
Earnings from oilseeds dipped 0.7% to US$2.3m whilst revenue fell 23.2% to US$143.75m. Lower revenue was mainly due to lower sales and crushing volume whilst margins were slightly stronger.
GAR warned that its operating performance will continue to be affected by the prices of CPO and competing seed oils, fluctuating foreign currency exchange rates and weather conditions. "We expect the demand of palm oil to remain strong supported by global demand growth, including the implementation of the biodiesel mandate in Indonesia."
Do you know more about this story? Contact us anonymously through this link.