Golden Agri Resources' loss widens 70.7% to $64.45m in H1

Softer crude palm oil (CPO) prices continued to drag on earnings.

Golden Agri Resources booked a loss of $64.45m in the first half of the year, up 70.5% YoY from $37.75m in the same period last year, an announcement revealed. Revenue also dropped 13.9% YoY to $4.4b from $5.11b previously.

For the second quarter, losses piled up 65.8% YoY to $89.9m from $54.21m over the same period last year, whilst revenue fell 16.7% YoY to $2.15b from $2.63b last year.

The group’s dismal performance was mainly attributed to softer crude palm oil (CPO) prices.

Also read: Golden Agri Resources profits climbed 53.5% to $25.07m in Q1

Earnings before tax, noncontrolling interests, interest on borrowings, depreciation and amortisation, net loss from changes in fair value of biological assets and foreign exchange gain/(loss) and exceptional items (EBITDA) stood at almost $275m for H1, a 16.8% YoY decline from $330.56m; whilst Q2 EBITDA crashed 33.8% YoY to $107.4m from $162.27m in Q2 2018.

Revenue from the plantation and palm oil mills segment declined by 16.1% YoY to $797.32m in H1 due to lower CPO prices during the period, although it was partially offset by higher sales volume due to sell-down of inventory. Meanwhile, the total fresh fruit bunch (FFB) and palm product output for the period was lower at 4.46 million tonnes and 1.29 million tonnes respectively, in contrast to 4.6 million tonnes and 1.32 million tonnes reported in H1 2018, primarily affected by the bumper crop in 2018.

Half-year revenue from the palm, laurics and others segment also shrunk 13.6% YoY to $4.38b, due to lower CPO prices and lower sales volume for oilseeds in China, which was partially offset by strong demand for biodiesel in Indonesia.

Also read: Golden Agri's 6% output growth trailing behind peers and industry: analyst

Despite lower prices, EBITDA increased from $56.13m in H1 2018 to $139.39m during the first half of the year mainly due to additional contribution from biodiesel and the removal of export levy in Indonesia.

“We expect production growth to slow down given the age profile of the industry and cyclicality of fruit production, while the demand growth for CPO is estimated to remain stable underpinned by global food and energy demand, particularly the increase in biodiesel consumption in Indonesia,” the company said in a statement.

The group’s reported total assets remained firm at $11.87b as of 30 June. Total liabilities increased from $5.88b at end-2018 to $5.97b, which the group attributed to the recognition of lease liabilities and increase in other payables.