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Golden-Agri Resources reports 1QFY2024 earnings of US$37 mil, down 60% y-o-y

Supply constraints will gradually ease in the coming quarters

Golden Agri-Resources has held its 1QFY2024 revenue at US$2.56 billion, up 1% y-o-y. However, earnings dropped 60% over the same period to US$37 million, as the company weathered unfavourable forex, booked fair value losses and so on.

Underlying profit, which excluded these one-offs, was down 29% y-o-y to US$79 million

As at March 31, the company's planted area remained at approximately 532,000 hectares, of which 494,000 hectares were mature.

Nucleus and plasma estates made up 417,000 and 115,000 hectares of this area, respectively.

Fruit yield for the first quarter of 2024 was down 6% y-o-y, from 4.16 tonnes to 3.89 tonnes per hectare as the impact from last year’s El Niño began to materialise.

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However, this shortfall in harvested output was partly compensated by higher purchase volume of third-party fruits, limiting the decrease in palm product output to 4% for the quarter to 590,000 tonnes.

Golden Agri's downstream business grew its sales volume by 10% y-o-y in the first quarter of 2024, primarily from palm-based refined derivative products.

In its earnings commentary, the company says it is exploring new growth areas such as alternative biomass products and other sustainability-related initiatives.

The company observes that palm oil was "notably constrained" in 1QFY2024 due to the combination of low seasonal yields and the effect of the El Niño phenomenon encountered in the third quarter of 2023.

"While supply constraints will gradually ease in the coming quarters, the growth prospect is expected to be limited," the company says.

On-going geopolitics will sustain uncertainties within the vegetable oil sector and seen to crude palm oil prices for the rest of the year.

"We will continue to closely observe the development of these key factors, alongside the global macroeconomic conditions," the company says.

Golden Agri Resources shares last traded at 27 cents.

 

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