Golden Agri records better performance on higher CPO prices: analyst

It has posted a 15% drop in its FY2020 net profit to US$230m.

Golden Agri-Resources (GAR) has registered a 15% decline in its net profit for FY2020 to US$230m, the company said in a bourse filing.

CEO and chairman Franky Widjaja said the company expects to further recover in 2021, whilst anticipating potential volatility.

“Demand is expected to remain strong with recovery from the COVID-19 pandemic including the demand from Indonesian biodiesel. However, we still need to anticipate volatility with the lingering COVID-19 pandemic,” he said.

Meanwhile, OCBC Investment Research (OIR) noted that GAR’s results came in above its forecasts.

According to OIR analyst Chu Peng, GAR benefited from higher CPO prices and strong recovery in downstream business.

“GAR could benefit from renewed confidence on Indonesia’s B30 programme which remains the key catalyst to the industry,” Chu added.

Factoring in fresh fruit production forecast and average selling price assumption, OIR has given a “hold” rating for GAR and a raised fair value estimate at $0.21.