Golden-Agri Resources (GAR) reported earnings of US$188.6 million ($249.0 million) for the 2HFY2020 ended December, 21.5% lower than earnings of US$240.4 million for the 2HFY2019.
Earnings for the FY2020 plunged 83.6% y-o-y to US$31.8 million from US$194.0 million a year ago.
Revenue for the 2HFY2020 grew 12.9% y-o-y to US$3.69 billion, while revenue for the FY2020 increased 10% y-o-y to US$7.08 billion.
Revenue from GAR’s plantations and palm oil mills segment grew 12% y-o-y to US$1.48 billion, while the group’s palm, laurics and others segment was up by 10.4% y-o-y to US$7.06 billion.
The higher full-year revenue was primarily due to the appreciation of market prices for crude palm oil (CPO).
During 2020, CPO prices (FOB Belawan) averaged 32% y-o-y higher at US$691 per tonne.
The group’s upstream business benefitted from the uptrend in CPO market prices in the second half, which improved contribution to the group’s consolidated EBITDA.
GAR’s downstream business grew in line with the logistics recovery after the Covid-19-induced lockdown in major consuming countries.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) for the 2YFY2020 stood 3.8% y-o-y lower at US$480 million, but came in more than double that of 1HFY2020’s EBITDA.
As such, full-year EBITDA came in marginally lower at US$669 million from US$697 million.
Despite higher revenue for the 2HFY2020 and FY2020, the lower EBITDA and earnings were due to foreign exchange losses and lower fair value gain on financial assets for the current year.
The group recorded a foreign exchange loss of US$32.1 million in FY2020 compared to net gain of US$37.3 million the year before.
As at end-December, cash and cash equivalents stood at US$399.2 million.
The group has proposed a final dividend of 0.48 cents per share for the FY2020, compared to the 0.58 cents per share in FY2019. This will be payable on May 18.
In the second half of the year, global economies started to open with CPO market prices strongly rebounding supported by extreme tightness in global vegetable oil supply and demand. Weather continues to hold the key to driving short-term vegetable oil supplies. Palm oil production is expected to grow next year after a decline in 2020. 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,” says GAR chairman and CEO Franky O. Widjaja.
“Our strategy is built on palm oil’s competitiveness as an essential ingredient for everyday needs based on evolving global consumer preferences towards health-friendly and sustainably-produced products. Our position as a leading producer with strong sourcing capabilities, an extensive portfolio of palm-based products, and an efficient end-to-end supply chain, provides us a sound foundation for sustainable growth,” he adds.
Shares in GAR closed 0.3 cents higher or 1.6% up at 19.3 cents on Feb 25.
