First Resources recorded a 23.4% increase in sales to US$897.1 million ($1.2 billion) for the 9MFY2022 ended September on the back of stronger palm oil prices, with Ebitda and underlying net profit surging by 91.2% and 206.0% to US$390.7 million and US$253.8 million respectively.
For the 3QFY2022 period, the group managed to achieve an improvement in average selling prices amidst the challenging market conditions to record a 15.2% uptick in sales. Further aided by Indonesia’s export levy suspension from July 15, the group’s Ebitda and underlying net profit increased by 47.5% and 120.1% respectively, as compared to the same period last year.
With the resumption in palm oil exports following the government’s continued suspension of the export levy and relaxation of the Domestic Market Obligation (DMO) policy post the lifting of the export ban on May 23, inventory levels in Indonesia have started normalising to less burdensome levels.
However, with the CPO reference price having increased to above the US$800 per tonne threshold, export levy is expected to be reimposed from the second half of November this year.
Having said that, with palm oil’s attractive relative pricing against other competing edible oils encouraging replenishment of inventories by importing countries, the group believes that palm oil consumption demand should continue to remain supportive.
On the production front, the group’s output for 4QYFY2022 is expected to taper off q-o-q from its peak production quarter in 3QFY2022, albeit overall output growth is still expected to be achieved for the full year ending December.
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Equity attributable to owners of the company increased by 8.0% from US$1.2 billion in FY2021 to US$1.3 billion as at 9MFY2022, mainly contributed by the profits generated during 9MFY2022, partially offset by the dividends paid and foreign currency translation losses arising from the depreciation of Indonesian rupiah against US dollar during the period.
The group’s financial position remains healthy with gross gearing ratio at 0.23x and cash and bank balances of US$378.4 million as at end September. The group also has undrawn committed unsecured credit facilities available of US$50.0 million, which may be utilised for its general corporate purposes.
Shares in First Resources last traded at $1.52 on Nov 11.
