Third quarter 2023 EBITDA grew 13 per cent quarter-on-quarter, with nine-month revenue of US$739 million and a healthy margin of 10 per cent
Financial position remains strong with a low gearing ratio of 0.56 times
SINGAPORE, Nov. 14, 2023 /PRNewswire/ -- Golden Agri-Resources Ltd ("GAR" or the "Company")'s financial results for the nine-month period ending September 2023 remained firm, in line with industry trends during this period. Average CPO market price (FOB Belawan) in the nine-month period of 2023 was US$922 per tonne, continuing the normalisation of prices after 2022's record high of US$1,368 per tonne. Revenue decreased by 15 percent year-on-year to US$7.32 billion, with expanded sales volume partly offsetting lower average selling prices.
Financial_Highlights
Third-quarter performance strengthened against the previous quarter, resulting in EBITDA of US$739 million or a healthy 10 per cent margin for the nine-month period of 2023. Underlying profit and net profit for the nine months of 2023 were US$327 million and US$250 million, respectively.
GAR's downstream business continued to perform well, with a notable 17 percent year-on-year increase in sales volume. Its focus in pursuing value-added products has helped to reduce the impact of industry volatility, compensating for the lower CPO prices that affected GAR's plantation business.
GAR's financial position remained strong with a low gearing ratio of 0.56 times and net debt to EBITDA ratio of 0.25 times.
On the outlook, Mr Franky O. Widjaja, GAR Chairman and Chief Executive Officer, commented: "GAR remains positive about the palm oil industry's long-term outlook. With the growing concern about adverse weather conditions, global vegetable oil supplies are expected to remain tight. In terms of short-term development, drought conditions across producing regions in Southeast Asia and South America point to the possibility of a slowdown in palm oil and soybean oil production. The upcoming festive season and strong biodiesel demand are expected to support the consumption of vegetable oils. However, lingering geopolitical tensions and unstable global economic conditions will continue to add to market uncertainty. As such, we remain cautious and will closely monitor the supply-demand dynamics of the industry."
Operational Highlights
GAR’s downstream performance helped to reduce the impact of industry volatility, compensating for the lower CPO prices.
As of 30 September 2023, GAR's planted area stood at approximately 534 thousand hectares, of which 495 thousand hectares was mature. Nucleus and plasma estates made up 419 thousand and 116 thousand hectares, respectively.
Palm product output in the third quarter was up by 18 per cent compared to the previous quarter, in line with the seasonal changes to productivity. However, overall fruit yield for the nine months of 2023 decreased slightly from 15.07 tonnes to 14.42 tonnes per hectare year-on-year. As a result, palm product output during nine months of 2023 was 2.17 million tonnes compared to 2.29 million tonnes for the same period last year. The decrease was primarily due to the preparation of old estates for replanting and heavy rainfall in Kalimantan during the early part of the year.
Ongoing Investment in Sustainability
GAR continues to invest in supply chain traceability and supplier transformation. The Company aims to capture growing demand for sustainable products while navigating regulatory changes, further strengthening the long-term viability of its integrated palm business.
GAR has achieved around 98.5 per cent Traceability to the Plantation (TTP) for its palm production and supply chain in Indonesia. The Company is also working on extending Traceability to the Mill (TTM) for its global palm supply chain, bringing traceability coverage to the Company's merchandising business outside of Indonesia. These traceability initiatives underpin GAR's efforts to transform its supply chain, enhancing sustainable practices and verifying its compliance with its No Deforestation, No Peat and No Exploitation (NDPE) commitments. It will also help GAR to maintain progress towards compliance with incoming regulations such as the EU Deforestation Regulation (EUDR).
The Company remains vigilant during the continued El Ni?o dry season in Indonesia. GAR is proactively monitoring and responding to fire outbreaks, supported by technology such as the GeoSMART app which can detect fire risk hotspots three times faster than previous methods. Through the Desa Makmur Peduli Api programme, GAR is helping communities in and around our concessions with education, equipment and early-warning systems to tackle fires where they occur, while focusing on addressing the underlying conditions that contribute to fire risk.
About Golden Agri-Resources Ltd (GAR)
GAR is a leading fully-integrated agribusiness company. In Indonesia, it manages an oil palm plantation area of 534,456 hectares (including plasma smallholders) as of 30 September 2023. It has integrated operations focused on the technology-driven production and distribution of extensive portfolio of palm-based products throughout its established international marketing network.
Founded in 1996, GAR was listed on the Singapore Exchange in 1999 and has a market capitalisation of US$2.5 billion as of 30 September 2023. Flambo International Limited, an investment company, is GAR's largest shareholder, with a 50.56 percent stake. In addition, GAR has several subsidiaries, including PT SMART Tbk, which was listed on the Indonesia Stock Exchange in 1992.
As an integrated agribusiness, GAR delivers an efficient end-to-end supply chain, from responsible production to global delivery. In Indonesia, its primary activities include cultivating and harvesting oil palm trees; the processing of fresh fruit bunch into crude palm oil (CPO) and palm kernel; refining CPO into value-added products such as cooking oil, margarine, shortening, biodiesel and oleo-chemicals; as well as merchandising palm products globally. GAR's products are delivered to a diversified customer base in over 100 countries through its global distribution network with shipping and logistics capabilities, destination marketing, on-shore refining and ex-tank operations. GAR also has complementary businesses such as soybean-based products in China, sunflower-based products in India, and sugar businesses.
