SINGAPORE (Feb 26): First Resources, the Indonesia-based palm oil producer, reported full-year earnings rose 9.8% to US$139.5 million ($183.9 million) from a year ago while underlying net profit rose 20.8% to US$139.5 million in FY17. This came on the back of a 12.5% growth in sales to US$647.0 million.
The improved topline performance in FY17 was largely boosted by stronger sales volumes and higher average selling prices of both crude palm oil (CPO) and refined products as compared to the same period in FY16.
Correspondingly, the group’s EBITDA rose 16.2% to US$292.1 million in FY17. Plantations and Palm Oil Mills contributed 5.9% higher EBITDA of US$272 million while Refinery and Processing returned to profitability with EBITDA of US$18.6 million.
The group’s financial position remained healthy with cash and bank balances increasing to US$278.9 million as at Dec 31 2017 and a low net gearing of 0.21 times.
First Resources' board of directors is proposing a final dividend of 2.15 cents per share, which brings the full-year ordinary dividend to 3.40 cents per share.
In addition, the board is recommending a special dividend of 3.40 cents per share to commemorate the 10th anniversary of First Resources’ listing and 25 years since the group’s establishment in 1992.
First Resources manages more than 200,000 hectares of oil palm plantations and 15 palm oil mills across the Riau, East Kalimantan and West Kalimantan provinces of Indonesia.
With the effects of the El Nino wearing off and an increase in mature hectarage, the group says production of fresh fruit bunches (FFB) increased by 14.1% to 3.0 million tonnes, with FFB yield recovering to 17.5 tonnes per hectare in FY17 compared to 16.8 tonnes per hectare in FY16. CPO production also grew 10.6% to 702,368 tonnes in FY17, with CPO yield at 3.9 tonnes per hectare compared to 3.8 tonnes per hectare a year ago.
Ciliandra Fangiono, CEO of First Resources, says, "The group anticipates its production volume growth to extend into 2018 from continued yield recovery and contribution from newly mature plantations. While higher industry production volumes and competition from other edible oils are expected to influence palm oil prices, improving crude oil prices and potential domestic demand growth in Indonesia from its biodiesel mandate policy may lend some support to prices.”
Shares in First Resources closed at $1.76 on Monday.
