SINGAPORE (Oct 27): IndoAgri, the manufacturer of edible oils and fats products, reported a 37% decline in 3Q17 earnings of Rp101 billion ($10.1 million) from Rp159 billion a year ago.
This came on the back of lower gross profit arising from higher fertiliser application, higher operating expenses and foreign currency fluctuations.
3Q17 revenue increased 5% to Rp3.7 trillion on higher sales contribution from the plantation division. Its Plantation Division achieved a 3% revenue growth in 3Q17 on higher sales volume of palm products, but partly offset by lower selling prices of palm products and lower sugar sales.
Gross profit declined 11% in 3Q17 due to the effects of lower selling prices of palm products, higher palm production costs arising from higher fertiliser application, and lower sugar sales.
Profit from operations declined 29% in 3Q17 on lower gross profit, higher operating expenses and foreign currency fluctuations. But the decline was partly offset by improved results from CMAA.
CEO and Executive Director Mark Wakeford says the group reported a strong recovery in palm production with 9M17 FFB nucleus and CPO production increased 12% and 9% y-o-y to 2,317,000 tonnes and 626,000 tonnes, respectively. This resulted in a 30% rise in 9M17 earnings rose to Rp370 billion.
In line with the growth in palm oil production, IndoAgri is building three new mills, of which one has been completed in May 2017, the second one by end 2017 and the third one in 2018. It is also expanding our refinery in Surabaya by 300,000 tonnes per annum to meet the increased demand, which will be completed in 1Q18.
It is expanding its refinery in Surabaya by 300,000 tonnes per annum to meet the increased demand, which will be completed in 1Q18.
Its sugar operation in Brazil has also turned around from a loss position to profitability this year from higher sugar crushing and selling prices.
In Indonesia, IndoAgri says its operations continue to be supported by a positive domestic economic outlook, the ongoing fiscal reforms in the areas of infrastructure and social security, and large domestic consumption.
Shares in IndoAgri closed 2 cents higher at 46 cents.
