First Resources Q3 profits climbed 22.2% to $53.76m

The increase was mainly driven by higher production volumes.

First Resources’ profits grew 22.2% to $53.75m (US$38.9m) in Q3 from $43.9m (US$31.9m) for the same period in 2017, an announcement revealed. Its revenue also climbed 24.7% to $236.32m (US$171.43m) from $189.48m (US$137.45m).

The firm attributed its profit growth to higher production volumes which were partially offset by the effects of weaker palm oil prices. Revenue rose on the back of higher sales volumes that were partially offset by lower average selling prices.

The latest quarterly earnings deviates from First Resources’ Q1 results which saw profits crash 42.8% to $38.23m (US$27.73) due to the effects of inventory build-up and lower average selling prices.

Also read: First Resources Q1 profit crashed 42.8% to US$27.73m

The firm’s cost of sales jumped 33% to $121.17m (US$87.9m) due to higher sales volumes as well as higher operating costs from First Resources’ increased mature plantation hectarage, the statement revealed.

Refinery and processing volume grew 47.2% to 284,792 tonnes in Q3 from 193,458 tonnes in 2017, whilst its sales rose 36.3% to $227.10m (US$164.74m) from $166.59m (US$120.84m).

First Resources noted that palm oil prices were weak in Q3 and will remain volatile following macro developments such as US-China trade tensions, as well as changes to the import and export tax structures in consuming and producing countries.

“On the biofuel front, demand for palm oil is expected to be supported by the extension of Indonesia’s biodiesel policy together with the favourable spread between gasoil and palm oil prices, which has resulted in palm-based biodiesel becoming more economically viable,” First Resources said.