First Resources Limited’s net profit surges threefold to US$253.8m in 9M 2022

EBITDA is also 91.2% higher than a year ago.

First Resources Limited saw its net profit jump threefold in the nine months ending 30 September, as higher prices of palm oil boosted sales, the company’s latest bourse filing showed.

The company reported a net profit of US$253.8m in 9M 2022, a 206% surge from its profits reported over the same period in 2021. This was thanks to its sales increasing 23.4% to US$897.1m during the period.

Earnings before interest, taxes, depreciation and amortization (EBITDA) also jumped 91.2% to US$390.7m.

The sales improvement carried on in the third quarter, with First Resources reporting a 15.2% uptick in sales, aided by Indonesia’s export levy suspension. As a result, the group’s EBITDA rose 47.5% whilst its net profit for the quarter more than doubled, rising 120.1%, compared to Q3 2021.

Equity attributable to owners of the company rose by 8% from US$1.19b as at 31 December 2021 to US$1.29b as at 30 September 2022, mainly contributed by the profits generated in the first nine months of 2022.

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This was partially offset by the dividends paid and foreign currency translation losses arising from the depreciation of Indonesian Rupiah against United States Dollar during the period, First Resources said.

The company’s inventory levels in Indonesia has began normalising to “less burdensome levels” thanks to the resumption of palm oil exports and relaxation of the domestic market obligation policy, the company added.

“However, with the CPO reference price having increased to above the US$800 per tonne threshold, export levy is expected to be reimposed from the second half of November 2022. Having said that, with palm oil’s attractive relative pricing against other competing edible oils encouraging replenishment of inventories by importing countries, the group believes that palm oil consumption demand should continue to remain supportive,” First Resources stated in its latest financial report.

First Resources expects production to taper off in Q4 from its peak in Q3, although overall output growth is still expected to be achieved.