Golden Agri-Resources ended year 2013 with commendable fourth quarter results

Posted: Feb 28, 2014 4 minute read GAR 137 views
  • 4Q 2013 core net profit almost triple previous quarter’s
  • Double digit quarter-on-quarter recovery in palm products output for 4Q 2013
  • Proposed final dividend of 0.515 Singapore cents per share, adding to previous interim dividend of 0.585 Singapore cents for a total of 1.100 Singapore cents

Singapore, 28 February 2014– Revenue of Golden Agri-Resources Ltd and its subsidiaries (“GAR” or the “Company”) for fourth quarter 2013 grew by 21% compared to previous quarter, mainly driven by the expansion of its downstream business inIndonesia. EBITDA1 surpassed US$200 million, and grew 81% quarter-on-quarter.Core net profit2 shot up to US$113 million from US$38 million in the previous quarter.This strong performance was supported by production growth of 18% and appreciation of Crude Palm Oil (“CPO”) market prices by 8%.

FINANCIAL HIGHLIGHTS

US$’million Quarter ended Change Year ended 31 Dec Change
31 Dec
2013
(4Q 2013)
30 Sep
2013
(3Q 2013)
2013
(FY 2013)
2012
(FY 2012)
Revenue 1,902 1,571 21% 6,585 6,052 9%
Gross Profit 425 277 53% 1,363 1,611 (15%)
EBITDA1 201 111 81% 662 785 (16%)
Core Net Profit2
Addition:

Net gain from changes in fair
value of biological assets, net of
tax and non-controlling
interests
3

Foreign exchange loss, net of
non-controlling interests

Exceptional items, net of non
controlling interests

Net Profit attributable to
owners of the Company

113

27

(17)

123

38

(8)

30

199%

n.m

128%

307%

318

27

(34)

311

404

37

(7)

(24)

410

(21%)

(27%)

362%

(100%)

(24%)

Core Earnings per Share4
(US$ cents)
0.88 0.30 199% 2.48 3.25 (24%)

 
Full year 2013 EBITDA1 and core net profit2 registered weaker performance at US$662 million and US$318 million, respectively, compared to year 2012. This was largely due to depreciation of CPO market prices and lower production. Average CPO market prices for the year 2013 decreased by 17% to US$797 per tonne from US$959 in the previous year.

As at 31 December 2013, total assets grew by 6% to US$14.1 billion compared to US$13.3 billion at the end of 2012, supported by our continued expansion of upstream and downstream business. For 2014, GAR has budgeted US$550 million of capital expenditure to execute its growth strategy priorities. Total liabilities stood at US$5.3 billion, while gearing ratio (net debt to equity) remained prudent at 0.23 times.

In light of the continued strong balance sheet and our commitment to consistently reward our shareholders, the Board is pleased to propose final dividend distribution of 0.515 Singapore cents per share. Combined with interim dividend of 0.585 Singapore cents paid in last November 2013, the total dividend for year 2013 will become 1.100 Singapore cents. This is a special dividend of 35% of underlying profit, exceeding GAR’s dividend policy of 30% of underlying profit. The proposed final dividend will be distributed in May 2014, after obtaining approval from shareholders. Previous year, the total dividend distributed was 1.190 Singapore cents per share.

OPERATIONAL HIGHLIGHTS

Palm products output for the last quarter of 2013 recovered strongly by 18% compared to the previous quarter consistent with its seasonal trend. Full year production was still lower by 5% due to palm tree’s biological cycle following the bumper crop experienced in 2012. Production was also affected by less favourable w eather conditions in mid-2013.

GAR remains the leading oil palm plantation company in Indonesia in terms of planted area. By the end of 2013, GAR’s total planted area was 471,100 hectares, including plasma. Average age of the trees was 13 years, a favourable age that provides high yields while supporting sustainable production growth in the near to medium term.

OUTLOOK AND STRATEGY

Chairman and Chief Executive Officer, Mr. Franky Widjaja commented on the 2013 results: “For GAR, 2013 has been a mix of opportunities and challenges. We started the year with a strengthened downstream team. Integration has progressed during the year. Despite the challenges from both weaker CPO prices and lower plantation output, we ended 2013 with commendable fourth quarter results. Our China Operations also achieved a positive turnaround.”

Mr Franky Widjaja further elaborated: “For the past six years, global consumption of palm products has grown by approximately 3 million tonnes per year, which was mainly for food consumption. Moving forward, we envisage that palm oil demand will further grow, especially from the bio-energy sector, for example, the Indonesian Government has announced to increase the usage of biofuel. We believe that 2014 will be more exciting for the industry. GAR is well-positioned to fully benefit from the strong fundamentals of the palm oil industry”.

-ENDS-

About Golden Agri-Resources Ltd (“GAR”)

GAR is a leading palm oil plantation company with total planted area of 471,000 hectares (including smallholders) as at 31 December 2013, located in Indonesia. It has integrated operations focused on the production of palm-based edible oil and fat.

Founded in 1996, GAR is listed on the Singapore Exchange since 1999 with a market capitalisation of US$5.5 billion as at 31 December 2013. Flambo International Limited, an investment company, is GAR’s largest shareholder, with a 49.95% stake. GAR has several subsidiaries, including PT SMART Tbk which is listed on the Indonesia Stock Exchange since 1992.

GAR is focused on sustainable palm oil production. In Indonesia, its primary activities include cultivating and harvesting of oil palm trees; processing of fresh fruit bunch into crude palm oil (“CPO”) and palm kernel; and refining CPO into value-added products such as cooking oil, margarine and shortening. It also has integrated operations in China including a deep-seaport, oilseeds crushing plants, production capabilities for refined edible oil products as well as other food products such as noodles.

For media enquiries, please contact:
Ang Shih Huei
Bell Pottinger Asia
Tel: (65) 6333 3449
Fax: (65) 6333 3446
Cell: (65) 9189 1039
Email: sang@bell-pottinger.com

References:

  1. 1EBITDA is earnings before tax, non-controlling interests, interest on borrowings, depreciation and amortisation, net gain from changes in fair value of biological assets, foreign exchange gain/(loss), exceptional items and share of results of associated companies and joint ventures.
  2. 2Core Net Profit is net profit attributable to owners of the Company, excluding net effect of net gain from changes in fair value of biological assets, foreign exchange gain/(loss) and exceptional items.
  3. 3In accordance with International Accounting Standards (“IAS”) No. 41, biological assets (plantations) are stated at fair value less estimated point-of-sale costs. The fair value of plantations is determined based on the present value of their expected future net cash inflows. Any resultant gains or losses arising from changes in fair value are recognised in the income statement.
  4. 4Core Earnings per Share is Core Net Profit divided by weighted average numbers of shares.

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