- EBITDA1 for year-to-date September 2022 reached over US$1.3 billion, whilst net profit more than doubled to US$675 million
- Splendid performance across upstream and downstream business segments
Singapore, 14 November 2022 – Golden Agri-Resources Ltd (“GAR” or the “Company”) achieved a new record performance for the nine-month period to end September 2022. EBITDA reached over US$1.3 billion, a 62 percent increase year-on-year. Underlying profit grew to US$726 million and net profit more than doubled to US$675 million.
Revenue reached US$8.6 billion, an increase by 18 percent year-on-year. This was primarily due to higher palm oil prices partly offset by lower sales volume. CPO market prices (FOB Belawan) for the nine months increased by 23 percent from the same period last year, averaging US$1,368 per tonne.
Both upstream and downstream businesses performed splendidly during the nine months of 2022 with our downstream business achieving the largest EBITDA growth. Amidst a volatile industry environment, we have been able to leverage our sustainability efforts, food safety initiatives, traceability to the plantation, and integrated business model and successfully extract value throughout the value chain, including optimising the usage of our facilities, logistic capabilities, product portfolio, and geographical presence.
On the outlook, Mr Franky O. Widjaja, GAR Chairman and Chief Executive Officer, commented: “The palm oil industry outlook is expected to remain favourable. Global vegetable oil supply experiences slower-than-expected growth as La Nina conditions persist, resulting in drought impacting oilseeds production in South America. In Southeast Asia high rainfalls hindered the oil palm harvesting process in certain regions, which in Malaysia was exacerbated by the continuing labour shortage. The lingering geopolitical tensions also impacted supply. Global vegetable oil demand, on the other hand, continues to be strong. Palm oil price discount to other vegetable oils has become larger, while crude oil prices remain elevated. These conditions provide strong support to palm oil prices. Palm oil as the most productive and cheapest vegetable oil will continue to be an attractive alternative both for food and energy consumption.”
Notwithstanding the more conducive market environment, we remain cautious of any uncertainties affecting the market – among other things, changes in trade policies both in consumer and producing countries, potential global recession, weather conditions, increasing interest rate, and developments in vegetable oil and crude oil prices.
As of 30 September 2022, GAR’s planted area stood at approximately 535 thousand hectares, of which 503 thousand hectares was mature and the remaining immature. Nucleus and plasma estates amounted to 419 thousand and 116 thousand hectares, respectively.
Third-quarter palm product output saw a strong recovery with a 21 percent year-on-year growth, delivering a 5.6 tonnes per hectare fruit yield. This brought the nine-month yield to 15.1 tonnes per hectare, catching up to last year’s level. Accordingly, total output of palm products during nine months of 2022 remained constant at 2.3 million tonnes.
The sales volume of our downstream business was lower for the nine-month period due to the temporary export ban policy, but recovered strongly in the third quarter after the export ban was lifted, with a quarterly increase of 34 percent.
Supported by the strong performance, GAR’s financial position continued to strengthen with gearing ratio reaching a low of 0.50 times and net debt to EBITDA of 0.21 times.
We continue to progress towards a fully traceable palm supply chain. We have achieved more than 96 percent Traceability to the Plantation (TTP). We are also registering smallholders under the Ksatria Sawit programme which aims to accelerate TTP. This initiative reaches out to areas where many of our supplier mills buy from smallholders and traces their agents and farmers. More than 125,000 farmers have been registered under the programme.
Traceability helps us raise sustainability standards throughout our supply chain. We are better able to monitor our suppliers to ensure their compliance with our sustainability commitments. At the same time, we are actively engaging with them and helping them to strengthen their responsible production practices.
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About Golden Agri-Resources Ltd (GAR)
GAR is a leading palm oil plantation company in Indonesia with a total planted area of 534,803 hectares (including plasma smallholders) as of 30 September 2022. It has integrated operations focused on the technology-driven production and distribution of an extensive portfolio of palm-based products.
Founded in 1996, GAR was listed on the Singapore Exchange in 1999 and has a market capitalisation of US$2.3 billion as of 30 September 2022. 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 approximately 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.
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