Golden Agri profit slumps 19% to US$453m

The smaller earnings point to lower crude palm oil prices and poor sales.

In a release, Golden Agri-Resources Ltd and its subsidiaries (“GAR” or the “Company”) registered lower year-on-year performance for the first half 2012 with 19% decrease in EBITDA to US$453 million. The slowdown was largely attributable to lower Crude Palm Oil (“CPO”) prices coupled with a decrease in sales volume due to delayed shipments. Net profit stood at US$270 million, a 34% decline compared to last year.

Quarter-on-quarter EBITDA and net profit declined to US$200 million and US$108 million, respectively. GAR’s financial position as at 30 June 2012 remained healthy with strong cash balance and low net gearing ratio of 0.13 times. Total assets increased by 4% to US$12.4 billion since end of 2011.

GAR has been able to maintain its year-on-year fresh fruit bunch (“FFB”) production growth supported by larger area of mature plantations of approximately 27,800 hectares. FFB production (include plasma) for 1H 2012 grew by 4% to 4.2 million
tonnes from 4 million tonnes last year, while palm products output remained stable. Compared to the previous quarter, 2Q 2012 palm products output was 4% higher in line with its seasonality trend.

As at end June 2012, GAR’s total planted area was 457,000 hectares, remaining the largest in Indonesia. The age profile of GAR’s plantations is favourable, comprising 28% of immature and young plantations, and 46% in its prime age. With a low average age of 13 years of its plantations, the Company is well-positioned to maintain its long-term growth in production.