First Resources profits down 54% to $40.54m in H1

Higher sales failed to fully offset the impact of weaker palm oil prices.

First Resources Limited’s profits plunged by 54% YoY in H1 to $40.54m from $88.24m last year, an announcement revealed. Revenue also slipped 7.4% YoY to $406.15m in from $438.77m over the same period.

For the second quarter, profits fell by 20.7% YoY to $198.8m from $250.9m in Q2 2018 whilst revenue dropped by 52.8% YoY to $16.96m from $35.93m previously.

The losses were attributed to the effects of weaker palm oil prices. The company also reported higher costs of sales, which increased by 19.3% YoY to about $288.8m in H1 mainly due to the higher sales volumes of palm based products.

Also read: First Resources' profits dropped 55.7% to US$12.29m

Meanwhile, EBITDA fell by 39.1% YoY to more than $112.9m in the first six months of the year and by 42.2% YoY to $59.3m in the second quarter, mainly impacted by the lower average selling prices.

First Resources harvested 1.5 million tonnes of fresh fruit bunches (“FFB”) during the first half of the yeardown 8.1% YoY , whilst FFB yield hit 7.3 tonnes per hectare in 1H2019 as compared to the 8.3 tonnes harvested in H1 2018.. Meanwhile, crude palm oil (“CPO”) production also fell 10.3% YoY to 348,102 tonnes,and CPO yield was recorded at 1.7 tonnes per hectare as compared to the 1.9 tonnes harvested a year ago.

“Palm oil prices have been weighed down by uncertainties in the macro environment brought on by the ongoing US-China trade tensions as well as pressures from other competing vegetable oils. However, CPO price affordability and Indonesia’s biodiesel mandate is expected to be supportive of demand,” said Ciliandra Fangiono, CEO.

The Board of Directors has declared an interim dividend of $0.00625 per share payable on 12 September.