SINGAPORE (Feb 27): Bumitama Agri saw its earnings fall 21.2% to IDR 363.6 billion ($35.0 million) for the 4Q ended December, from IDR 461.6 billion a year ago.
This brings earnings for the full year in 2017 to IDR 1.19 trillion, 18.7% higher than earnings of IDR 1.01 trillion a year ago.
The lower 4Q earnings was mainly due to slower production during the quarter.
Revenue fell 9% to IDR 2.07 trillion in 4Q17, from IDR 2.27 trillion a year ago.
This was due to decrease in sales volume of crude palm oil (CPO) and palm kernel (PK), which fell by 11.7% and 13.9%, respectively.
The decline in revenue came despite the selling price of CPO and PK rising by 4.8% and 1.5% respective in 4Q17, as higher prices failed to overcome the drop in sales volume.
Biodiesel accounted for 3.3% of total revenue of FY17, down from 14.4% in FY16.
In view of thin profit margin, uncertain biodiesel market conditions, and the need to focus on improving the productivity of palm oil, Bumitama Agri has discontinued its biodiesel production plant at the end of 2017.
As at end December, cash and cash equivalents stood at IDR 216.7 billion.
Looking ahead, Bumitama Agri says CPO prices are expected to remain at the current level for the first half of 2018, in the absence of fresh positive news which can lift palm prices from its current level.
However, the group believes the long term fundamental of the palm oil industry remains positive, supported by increasing demand particularly from the growing domestic and emerging markets.
The group adds that it will continue to strengthen its business strategy and management, focusing on the upstream of this industry after the decision was made to close its biodiesel production plant.
Shares of Bumitama Agri close 1 cent higher at 71.5 cents on Monday.
