First Resources has reported earnings of US$128.6 million ($174.0 million) for the 2HFY2021 ended December, more than double the earnings of US$60.6 million in the corresponding period the year before.
This brings the group’s earnings for the FY2021 to US$161.1 million, up 61.6% y-o-y.
During the year, First Resources achieved its highest-ever total sales of US$1.03 billion, which grew 56.3% y-o-y, and lifted by total sales of US$619.4 million in the 2HFY2021, which was up 62.0% y-o-y.
The record figure was driven by a combination of higher average selling prices (ASPs) and stronger sales volumes.
FY2021 gross profit increased 57.9% y-o-y to US$461.6 million. Gross profit margin (GPM) for the year inched up by 0.4 percentage points at 44.7%.
2HFY2021 gross profit grew 61.7% y-o-y to US$288.3 million with a slightly lower GPM of 46.5%, from the 46.7% GPM seen in the 2HFY2020.
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The group’s gross profitability was boosted by the higher average selling prices, while margins were flattish due to the impact of increased purchases of palm oil products from third parties.
EBITDA for the FY2021 and 2HFY2021 grew 20.7% y-o-y and 42.8% y-o-y to US$312.9 million and US$217.4 million respectively.
In FY2021, First Resources saw growth in both its production volumes and yields.
Fresh fruit bunches (FFB) harvested in the FY2021 grew 2.9% y-o-y to 3.37 million tonnes, with FFB yield coming in at 17.2 tonnes per hectare, compared to the 16.4 tonnes per hectare in the year before.
Crude palm oil (CPO) production increased by 1.6% y-o-y to 869,241 tonnes, with a yield of 3.9 tonnes per hectare in the FY2021. CPO yield for the FY2020 stood at 3.8 tonnes per hectare.
As at end-December, First Resources reported a net gearing ratio of 0.02 times and cash and cash equivalents of US$190.7 million.
The board has proposed a final dividend of 5.1 cents per share, bringing the total dividend for the full year to 6.35 cents per share.
This is the group’s highest final dividend since its listing, and is in line with its revised dividend policy to distribute up to 50% of its underlying net profit annually.
Ciliandra Fangiono, CEO of First Resources says, “Palm oil prices rallied to record highs in the second half of 2021, fuelled by lower-than-expected supplies from key producing regions Malaysia and Indonesia, higher global energy prices and Indonesia’s continued commitment to its biodiesel mandate.”
In the near-term, Fangiono expects global vegetable oil supplies to “remain tight” due to “weather influences impacting production of palm oil and other soft oils, as well as continuing labour shortages at the Malaysian palm oil plantations”.
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“This is further exacerbated by export supply disruptions from Indonesia’s new domestic market obligation (DMO) policy enforcing palm oil exporters to sell 20% of their export volumes domestically at a stipulated price,” he adds.
“While the near-term supply tightness has been supportive of palm oil price, its relative pricing against other competing oils and the pace of supply recovery in the rest of the year will exert an influence on the direction of palm oil prices going forward,” continues Fangiono.
Shares in First Resources closed 1 cent lower or 0.57% down at $1.75 on Feb 24.
Photo: Bloomberg
