Blame it on the loss on foreign exchange.
Whilst Golden Agri-Resources recorded a 37% spike in revenues to $2.9b (US$2.04b) for the quarter ending in March, its net profit declined 60% to $52.6m (US$37.6m).
According to the group, the decline in net profit was mainly due to the loss on foreign exchange incurred during the past quarter.
Meanwhile, its strong revenues were supported by the appreciation of crude palm oil (CPO) market prices coupled with the continued recovery in palm production as the impact of El Niño eased.
Here's how its segments performed:
Plantations and palm oil mills
Palm product output in the first quarter of 2017 recovered by 26 percent year-on year and declined by 21 percent quarter-on-quarter to 695,857 tonnes. The year on-year increase was strong as El Niño impact gradually fades, while the quarter-on-quarter decline was due to seasonality. Stronger plantation output was the main factor that boosted the financial performance of our upstream business. EBITDA1 experienced a 29 percent year-on-year growth to US$183 million.
As at 31 March 2017, GAR’s total managed planted area was 488,276 hectares, comprising 79 percent of nucleus plantations and 21 percent of plasma smallholder plantations. Total mature area increased by 9,800 hectares to 476,269 hectares with fruit yield of 5.14 tonnes per hectare in the first quarter of 2017. GAR continues its replanting activities to support growth through intensification by using next-generation, higher-yielding planting materials.
Palm and laurics
The palm and laurics segment continued its contribution to GAR’s consolidated EBITDA although rising CPO market prices resulted in margin compression. First quarter 2017 recorded palm and laurics EBITDA of US$39 million, with a margin of 2.1%. GAR will maintain its strategy to enhance integration and operational excellence to improve margins in the long term.
Oilseeds and Others
The oilseeds and other segments mainly represent our business in China. These segments provided total EBITDA1 of US$3 million during the first quarter of 2017, a positive turnaround from previous quarter’s loss position of US$6 million.
GAR continues to explore long-term strategic alternatives for the oilseeds business and prudently manages risks to minimise the impact of any unexpected market volatility.
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