Golden Agri-Resources (GAR) has reported earnings of US$323.0 million ($438.4 million) for the 2HFY2021 ended December, 71.2% higher than earnings of US$188.6 million.
This brings earnings for the FY2021 to US$476.2 million, 14.9 times higher than the US$31.8 million reported in the FY2020.
According to GAR, the excellent performance is primarily supported by the continued high market prices for crude palm oil (CPO) and increased downstream business margins
During the FY2021, revenue increased 43.9% y-o-y to US$10.18 billion, boosted by a 55.3% y-o-y growth in 2HFY2021’s revenue of US$5.73 billion. The higher revenue in the FY2021 was mainly due to the strong international crude palm oil (CPO) prices, higher production output and improved margins from GAR’s downstream business.
Gross profit for the FY2021 surged 104.7% y-o-y to US$2.35 billion, lifted by 2HFY2021’s 69.9% y-o-y growth at US$1.29 billion.
FY2021 EBITDA surged 81.5% y-o-y to US$1.21 billion, a record for the group.
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Earnings per share (EPS) for the 2HFY2021 stood at 2.54 US cents, 71.2% higher y-o-y, while EPS for the FY2021 stood at 3.75 US cents, 15 times higher y-o-y.
FY2021 revenue from GAR’s plantations and palm oil mills segment increased by 47.8% y-o-y to US$2.19 billion, mainly due to the higher CPO prices and higher production. FY2021 EBITDA for the segment surged 87.3% y-o-y to US$779.2 million
The average international CPO (FOB Belawan) price for the current year stood 69.0% higher at US$1,168 per tonne as compared to US$691 per tonne in the previous year. However, after deducting the export tax and levy, the average CPO price was US$819 per tonne, 31% higher than in the previous year.
Palm, laurics and others saw revenue increase 43.8% y-o-y for the FY2021 to US$10.15 billion mainly due to higher average selling prices (ASPs), while EBITDA for the FY2021 increased 70.3% y-o-y to US$434.4 million.
In the 2HFY2021, the segment saw positive market developments in the 2HFY2021, which resulted in higher sales volume as compared to the 1HFY2021, bringing the full year sales volume the same level as that of the previous year.
“Despite the similar sales volume, our strategy towards more value-added products has resulted in the increase in EBITDA margin from 3.6% in FY2020 to 4.3% and translated into higher EBITDA of US$434.4 million for the current year,” says GAR in its March 1 statement.
FY2021’s share of profit in joint ventures surged 57.3 times y-o-y to US$34.4 million from US$0.6 million before due to the improved operating performance in a joint venture during the current year.
The group saw a net foreign exchange gain of US$32.4 million in the FY2021 compared to the net foreign exchange loss of US$32.1 million in FY2020. The gain in FY2021 was mainly due to translation foreign exchange gain arising from Indonesian rupiah (IDR) denominated monetary balances and fair value gain on forward foreign currency contracts entered to hedge the currency exposure.
As at end-December, cash and cash equivalents stood at US$485.1 million.
The group has declared a final dividend of 1.077 cents per share, over two times higher than the final dividend per share of 0.48 cents in the corresponding period before.
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This brings the total dividend per share to 1.605 cents for the FY2021, up 234% y-o-y.
The final dividend will be payable on May 17.
In addition, GAR will initiate a share buyback programme to “further reward our shareholders”, allocating up to US$100 million for the year 2022. The share buyback will be conducted based on authority and limits under the share purchase mandate authorised by GAR’s shareholders at the annual meeting.
“This firm set of results achieved by GAR in 2021 demonstrates the resilience of our business, its competitive strengths and the hard work of our employees. Our strategy to develop an integrated business model has resulted in a robust profit base for GAR,” says Franky O. Widjaja, GAR chairman and CEO.
“Worldwide edible oil supply remained tight during the year whilst economic conditions in major consuming countries recovered gradually. Moving forward, we expect the tight vegetable oil situation to persist. Palm oil, as a key contributor to meet the world’s demand for edible oils, is facing production challenges such as labour issues in Malaysia and under-fertilised smallholder plantations. Dry weather conditions in South America further strain global vegetable oil supply,” he adds.
Shares in GAR closed 0.5 cent lower or 1.72% down at 28.5 cents on Feb 28.
