Bumitama Agri's profits slipped 8% to $105,712.65 in 2018

It blamed weakening agriculture commodity prices and foreign exchange losses.

Bumitama Agri’s FY2018 profits dipped 8% YoY to $105,712.65 (IDR1.09b) from $114,988.19 (IDR1.19b) in 2017, an announcement revealed. Its revenue however inched up 3.1% YoY from $783,525.53 (IDR8.13b) to $807,595.90 (IDR8.38b).

In Q4, profits crashed 43% YoY to $19,981.7 (IDR207.37m) from $35,036.52 (IDR363.61m), whilst revenue rose 7% YoY from $198,473.80 (IDR2.06b) to $212,437.74 (IDR2.2b).

The firm attributed its dismal profit performance to the weakening of the agriculture commodity prices, especially during Q4. However, Bumitama Agri noted that an increase in sales volume was more than sufficient to offset the drop in selling prices in the Q4 2018 and for FY2018.

Meanwhile, the Group reportedly recorded a net foreign exchange gain of $1.83m (IDR19b) in Q4 2018 mainly due to translation on USD denominated borrowings in the Group’s IDR financial statements. However, a net foreign exchange loss of $5.49m (IDR57b) occurred in FY2018 due to the depreciation of IDR against USD during 2018.

On the other hand, the revenue increase was due to an increase in sales volume of crude palm oil (CPO) and palm kernel (PK) arising from improved palm production compared to previous corresponding periods, the firm explained. CPO sales volume jumped 24.7% YoY in FY2018 to 1.04 million MT, whilst palm kernel sales volume grew 25.5% YoY to 204,605 MT.

“CPO price has increased in January 2019, and is expected to maintain in the near future. This higher price will mitigate the lower seasonal fresh fruit bunches production in Q1 2019,” Bumitama Agri said in its financial statement. “The Group will continue to strengthen its business strategies, improve cost management and increase the contribution from young matured plantations.”