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Golden Agri's 1HFY2022 earnings surge 154% to US$390 mil on the back of higher CPO prices

GAR’s revenue rose 23.3% to US$5.5 billion compared to US$4.45 billion recorded in 1HFY2021.

Golden Agri-Resources (GAR) reported earnings of US$389.6 million ($533 million) for 1HFY2022, up 154% from the previous corresponding period at US$153.2 million.

On the back of higher crude palm oil (CPO) prices, GAR’s revenue rose 23.3% to US$5.5 billion compared to US$4.45 billion recorded in 1HFY2021 while EBITDA increased by 54.5% to US$807.4 million.

Gross profit grew 29.1% y-o-y to US$1.37 billion.

Revenue from its plantations and palm oil mills segment increased by 19.7% to US$1.3 billion in 1HFY2022.

The average international CPO (FOB Belawan) price for the current period was 46.6% higher at US$1,595 per tonne as compared to US$1,088 per tonne in the previous corresponding period.

Consequently, EBITDA from GAR’s plantations and palm oil mills segment increased by 42.6% from US$365 million in 1HFY2021 to US$520.5 million in 1HFY2022.

Its fresh fruit bunch (FFB) and palm product output for 1HFY2022 were lower at 4,765,000 tonnes and 1,453,000 tonnes respectively, compared to 5,183,000 tonnes and 1,598,000 tonnes respectively in 1HFY2021. This was mainly due to a shift in production seasonality.

GAR’s palm, laurics and others segment reported higher revenue of US$5.4 billion with an increase in EBITDA to US$287.9 million for 1HFY2022, mainly attributable to higher average selling prices and the improved margins from its downstream business.

Sales volume for 1HFY2022 was lower due to the temporary export ban implemented by the Indonesian government in May 2022. Despite this, GAR saw an increase in EBITDA margin from 3.6% in 1HFY2021 to 5.3% in 1HFY2022.

“The latest measures taken by the Indonesian Government in July 2022 have encouraged the export of palm oil products to reduce Indonesian stock levels. GAR supports the government's policy in safeguarding the country's domestic requirement of cooking oil,” the company said in a results statement.

As at end June, cash and cash equivalents stood at US$672.7 million. The board of directors has declared an interim dividend of 0.8 cents per share for the period.

In its outlook, the company said its operating performance will continue to be affected by the macroeconomic uncertainties. This includes the geopolitical environment; the prices of CPO and competing seed oils; developments in government policy on import duties and export taxes in the countries it trades in; interest rates; the price of fertilisers; as well as weather conditions.

“Overall we believe the outlook of CPO prices remains favourable due to the tightness in global vegetable oil supply, while demand for CPO is estimated to remain firm due to staple usage for food, oleochemicals and energy sector.

“The group will continue to enhance its integrated operation capabilities to optimise profit opportunities across the value chain, apply technological innovation for yield improvement and cost efficiency, and commit to sustainability initiatives,” it added.

Shares in Golden Agri closed at an unchanged 27.5 cents on August 12.


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