Golden Agri's Q4 net profit up 133.2% to $63.3m

Thanks to the strong contributions in the palm and lauric's segment.

Agribusiness Golden Agri-Resources Ltd and its subsidiaries recorded revenue of over US$7.2b for the past year, with net profit reaching US$400m.

For 4Q16, net profit climbed to US$46m, a 133.2% increase from $19.3m during the same period last year.

According to the group, it was able to deliver stronger earnings bolstered by its integrated business model and the appreciation of crude palm oil (CPO) market prices, more than offsetting weaker palm product output.

Further, the enhanced deferred tax income arising from the increase in tax depreciable value of plantation assets boosted its bottomline.

"For future tax benefit, GAR revalued some of its plantation assets in Indonesia resulting in substantial deferred tax income contributing to its current bottom line. The net tax impact recorded from this revaluation was US$304m for the full year 2016 including US$62m in the fourth quarter," Golden Agri noted.

Here's how the group's segments performed:

Plantations and palm oil mills

Palm product output in the fourth quarter of 2016 improved by seven percent year-on-year and 40 percent quarter-on-quarter to 877,077 tonnes. However, the
recovery in quarterly fruit production since mid-2016 did not compensate for the impact of the severe El Niño conditions in 2015 on full year production. During 2016, upstream business production was still 15 percent lower than last year at 2.5 m tonnes of palm products.

Weaker plantation output was the main factor affecting the financial performance of our upstream business. EBITDA1 recorded at US$379 m during 2016, nine percent lower than the previous year. Nonetheless, fourth quarter EBITDA saw a recovery, experiencing a 30 percent year-on-year growth to US$140 m.

As at end of 2016, GAR’s total managed planted area was 488,252 hectares, a slight increase from 485,606 hectares last year. This increase was mainly due to the consolidation of acquired plantations. GAR has been focusing on replanting activities for the past few years. This is part of our strategy to grow through intensification by using next-generation, higher-yielding planting materials to support sustainable production growth.

Palm and laurics

The palm and laurics segment has been growing its contribution to GAR’s EBITDA as a result of our focus on enhancing margins across the value chain.
With US$181 m of EBITDA1 in 2016, it contributed 32 percent to total consolidated EBITDA while margin improved to 2.9 percent from 1.9 percent
last year. Fourth quarter EBITDA1 recorded at US$45 m, significantly higher than the same period last year. 

Oilseeds and Others

The oilseeds and other segments mainly represent our business in China. These segments have maintained their positive contribution with total EBITDA of US$12 m during 2016, slightly lower than last year’s US$16 m. GAR will continue to explore long-term strategic alternatives for the oilseeds business and prudently manage our risks to minimise the impact of any unexpected market volatility.