Friday 29 Mar 2024
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SINGAPORE (April 30): Indofood Agri Resources' 1Q2015 earnings tumbled 81% y-o-y to IDR35 billion ($3.6 million) on lower revenue and foreign-exchange losses.

Revenue declined 16% to IDR2,659 billion as sales volumes and selling prices for crude palm oil, palm kernel and edible oils fell.

Crude palm oil prices averaged US$670 a tonne in 1Q2015, down from an average of US$816 in 2014, hurt by reduced demand from China and Europe, weak crude oil prices, and higher soybean supplies from the US and South America.

"Soft commodity prices for agriculture crops and a weakened Indonesian rupiah have directly affected our 1Q 2015 results," the palm oil producer said in a statement today.

The company incurred forex losses of IDR116 billion as the Indonesian currency weakened against the greenback and the Singapore dollar during the quarter.

Indofood's associates contributed profits of IDR3.7 billion, compared to losses of IDR21.9 billion a year earlier, although losses from its sugar joint venture in Brazil increased to IDR28.6 billion from IDR20.8 billion.

The company said while the Indonesian government's mandate to develop the biodiesel industry will sustain domestic demand for palm oil products - crude palm oil is used for making biodiesel - the implementation by Jakarta will take time.

"Competition from other CPO producers as well as competing products like soybean will be intense, given the added impetus of lower demand for biodiesel with the fossil fuel price drop," it said.

Indofood shares ended 1.3% lower at 74 cents yesterday. 

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