Indofood Agri Resources’ H1 net profit rises 31.6% to US$24.6 million

[SINGAPORE] Indofood Agri Resources on Friday (Jul 31) posted a 31.6 per cent increase in net profit to 444.5 billion rupiah (US$24.6 million) for the first half ended Jun 30, from 337.8 billion rupiah for the year-ago period.

Earnings per share climbed to 318 rupiah, from 242 rupiah previously.

The agribusiness group attributed the increase mainly to foreign-exchange gains, fair-value gains on biological assets and higher other operating income.

Revenue grew 2.5 per cent to 9.6 trillion rupiah, from 9.4 trillion rupiah a year earlier.

This came on the back of higher sales from Indofood Agri Resources’ edible oils and fats (EOF) division, which booked a 7 per cent increase in revenue and 24 per cent increase in segment profit.

The group’s plantation division recorded a 15 per cent increase in revenue, mainly due to higher sales volume and selling prices of palm products. Despite higher palm production costs, the segment’s profit grew 20 per cent. This was mainly due to higher net operating income and fair-value gains on biological assets.

Excluding inter-segment sales, however, the plantation division recorded lower external sales, as a higher proportion of its crude palm oil (CPO) was sold internally to the EOF division in H1, representing 94 per cent of total CPO sales volume in the recorded period, versus 84 per cent a year earlier.

The group said that CPO prices stayed “well supported” in H1, supported by “tight supply and stronger demand from Indonesia’s higher B50 biodiesel mandate”.

Still, it cautioned that commodity prices are “expected to remain volatile, driven by supply-demand dynamics and increasingly by weather-related disruptions including El Nino, geopolitical risks (and) policy developments” such as the US tariffs and import-export taxes.

“As a price taker, we will remain focused on improving operational performance, strengthening cost discipline, driving agronomic innovation and prioritising capital expenditure in critical areas.”

Indofood Agri Resources said it plans to increase sales volumes of its EOF division through “competitive pricing, strengthened distribution networks and consistent product availability to support Indonesia’s growing consumer and industrial markets”.

As for its plantation division, the group will “focus on targeted action plans”, such as improving operational results and prioritising capital investments in critical areas.

The counter ended Friday flat at S$0.355, before the release of its results.