SINGAPORE (Feb 28): IndoAgri, the agribusiness group and manufacturer of edible oils and fats products, reported a 65.4% fall in 4Q17 earnings to $8 million from a year ago on lower contribution from the plantation division and on the absence of the one-off gain in 4Q16.
4Q17 revenue fell 15.7% to $369 million from a year ago as its plantation division reported a 10% revenue decline in 4Q17 on lower sales volume of palm products of crude palm oil and palm kernel-related products and lower sugar sales.
For the FY17, earnings fell 11.7% to $46 million from $52 million a year ago.
FY17 revenue grew 12% to $1.6 billion over the same period last year, reflecting mainly the effects of higher sales volume and average selling prices of palm products, although this was partly offset by lower sugar sales.
Revenue from the edible oils and fats division grew 5% to $251 million in 4Q17 and 8% to $1 billion in FY17. This was mainly due to higher sales of cooking oil and margarine products. The improvement was attributed to competitive pricing and heightened marketing activities such as brand campaigns and tactical promotions.
The group’s 4Q17 gross profit declined 49% to $75 million due to the effects of lower sales volume of palm products and higher palm production costs arising from higher fertiliser application. On a full-year basis, gross profit decreased 8% to $328 million on higher palm production costs and lower profit contribution from sugar operation in Indonesia.
In its outlook, IndoAgri says agricultural commodity prices will continue to remain volatile driven by mixed fundamentals and global developments. As a diversified and vertically integrated agribusiness with a dominant presence in Indonesia, operations continue to be supported by a positive domestic economic outlook.
Shares in IndoAgri closed 1 cent higher at 36 cents on Tuesday.
