Golden Agri Q4 underlying profit falls 44 pct on output, price declines (updated)

Golden Agri-Resources

27/02/2018 04:10

* Q4 revenue falls 10 pct 
    * Q4 net loss, incl non-operating items, is $29 mln  
    * Expects plantation output to rise in 2018 
 
 (Adds comments from briefing) 
    SINGAPORE, Feb 27 (Reuters) - Singapore-listed palm oil 
company Golden Agri-Resources Ltd's  GAGR.SI  fourth-quarter 
underlying profit fell 44 percent from the same period a year 
ago and revenue declined as production volume and crude palm oil 
prices dropped. 
    The company, whose plantations are located in Indonesia, 
posted an underlying profit, which excludes non-operating items, 
of $37 million for the three month period ending in December, 
compared with $66 million a year ago. Full-year underlying 
profit rose 36 percent to $254 million. 
    Quarterly revenue fell 10 percent. Fourth-quarter 2017 crude 
palm oil (CPO) production fell 26 percent from the prior year 
quarter, which the company attributed to a large base effect 
after a sharp gain in fourth-quarter 2016 production as palm 
growth rebounded from the 2015 El Nino weather phenomenon that 
caused drought conditions in Southeast Asia. 
    Full-year 2017 CPO output rose 8 percent versus 2016.  
    Including an impairment loss on China assets and other 
non-operating items, Golden Agri posted a net loss of $29 
million in the fourth quarter. Last year, it agreed to sell its 
oilseed crushing and vegetable oil refining business in China to 
global trading house Louis Dreyfus Co.  urn:newsml:reuters.com:*:nL8N1NX4MZ 
    Full-year 2017 net profit was $74 million, down 81 percent 
from a year ago.  
    Golden Agri's 2018 plantation output may rise faster than a 
forecast 8 percent to 9 percent increase for the broader 
industry, Franky Widjaja, the company's chairman and chief 
executive officer, told reporters at the company's results 
briefing.  
    He said palm oil prices are expected to stabilise and to 
improve by $50 to $80 per tonne this year, citing industry 
consensus. 
    Earlier this year, European Union lawmakers unveiled draft 
rules that included banning palm oil in motor fuels from 2021. 
 urn:newsml:reuters.com:*:nL3N1PB1G5 
    Widjaja said that while there was little effect on demand 
from the potential ban currently, the industry was worried about 
the impact beyond 2020. 
    Europe accounts for 15 percent of the company's exports, 
Golden Agri said, and is used for purposes beyond biofuels, such 
as food production. 
    Shares of the company were unchanged at 36 Singapore cents 
at the mid-day halt in trading after falling earlier and are 
down 2.7 percent for the year-to-date. 
 
 (Reporting by Aradhana Aravindan; Editing by Richard Pullin and 
Christian Schmollinger) 
 ((aradhana.aravindan@thomsonreuters.com; +65 6403 5659; Reuters 
Messaging: aradhana.aravindan.thomsonreuters.com@reuters.net)) 
 
Keywords: GOLDEN AGRI RESULTS/