Golden Agri’s earnings inch up 2% to $53.15m

Thanks to a hefty tax credit.

A US$96.4m (roughly $129.7m) tax credit came to Golden Agri-Resources’ (GAR) rescue in Q2, as it boosted reported net profit after tax (NPAT) by 2% YoY to US$39.5m ($53.15m).

According to a report by OCBC, excluding exceptional items and forex losses, however, GAR estimated that core earnings would have jumped 279% YoY to US$40m ($53.82m).

El Nino dried up production in Q2, dragging down revenue by 5% YoY to about US$1.74b ($2.34b). As a result, earnings before interest, tax, dividends and amortisation (EBITDA) shriveled by 41% YoY to US$ US$85.9m ($115.59). GAR also turned in an operating loss of US$3m ($4.04).

Meanwhile, 2016 is expected to remain challenging for GAR. The company is bracing for operating performance to be slammed by prices of CPO and competing seed oils, climatic conditions, and fluctuating forex rates.

Production is also anticipated to remain soft, though offset by raised CPO prices.