Halcyon Agri harvests a 27% profit increase to $1.5m

19% increase in natural rubber sold.

Midstream natural rubber producer Halcyon Agri Corporation Limited announced a net profit of US$1.5 million for the first quarter ended 31 March 2013 (Q1 2013), up 27% over the same period last year. The company attributed its higher quarter on quarter profits on a 19% increase in the volume of natural rubber sold, as well as a 13% increase in the gross material profit per tonne.

Halcyon Agri’s Executive Chairman and CEO Robert Meyer said: “The results are a testament to our robust business model which sees us delivering strong growth in earnings despite volatile raw material prices.”

The Group’s revenue for Q1 2013 was US$50.1 million, 3.9% lower than Q1 2012, reflecting the lower market price of natural rubber in Q1 2013. Despite the lower market price of natural rubber, the average gross material profit per tonne of rubber sold rose 13% to US$375, as a result of more effective and efficient raw material procurement. The Group’s gross profit rose 30% to US$4.0 million in Q1 2013.

Administrative expenses rose 67% to US$ 1.5 million in Q1 2013, mainly due to an increase in professional fees of US$0.5 million, of which US$0.3 million was a non-recurring IPO expense.

On the Group’s outlook, Mr Robert Meyer said “We are encouraged by a strong momentum on the sales side and this supports the Group’s expansion strategy.”

As at 31 March 2013, the Group had committed offtake of 35,804 tonnes for the remainder of FY2013. This has since been further increased by 26,481 tonnes, as the Group secured additional offtake from 1 April 2013 to 10 May 2013. This translates to a currently contracted volume of 78,819 tonnes, a 18% increase as compared to 67,046 tonnes sold in FY2012. This volume may increase by 9,374 tonnes if the Group’s customers exercised their respective options to increase their offtake.

Halcyon Agri was listed on Catalist on 1 February 2013. Its initial public offering of 61 million shares at S$0.36 a share raised S$13.8 million (net of listing expenses). The proceeds are being applied to expanding and upgrading its processing facilities, and to general working capital requirements.