GAR Reports 60% Decline in Q1 2024 Net Profits Amid Falling CPO Prices

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GAR Reports 60% Decline in Q1 2024 Net Profits Amid Falling CPO Prices. Photo by: Sawit Fest 2021 / Hendra

PALMOILMAGAZINE, SINGAPORE – Golden Agri-Resources (GAR), a global agribusiness palm oil company, reported a 60% decrease in net profits for the first quarter of 2024, ending in March. The net profits reached only US$ 37 million, down from the same period last year, due to the continued decline in crude palm oil (CPO) prices during this period.

Despite this, the company’s revenue for the first quarter increased by 1% to US$ 2.6 billion, driven by higher sales volumes, although the impact of the declining prices persisted. GAR announced its financial report on Wednesday, May 15, 2024, revealing that the CPO market price (FOB Belawan) had decreased by 8% year-on-year (YoY), with an average price of US$ 910 per ton compared to US$ 990 per ton in the same period last year.

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GAR’s financial performance in the first quarter of 2024 remained robust despite the cheaper CPO prices. Earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased by 6% to US$ 231 million, but the company successfully maintained a margin of over 9%.

Also Read: TLDN Reports 34.6% Rise in Net Profits to Rp 70.25 Billion in Q1 2024

“Plantation business got decreasing output while the trade volume in downstream sector should be responsible on selling expectation,” the representative of GAR as quoted from Business Times, Saturday (8/6/2024).

In a whole, GAR got solid performance in the period. The decreasing profits namely happened for the loss of currency gap to the profits in the first quarter last year, higher interest expense as same as the market trend, general costs and seasonal administration that happened in the period.

GAR also mentioned that the company would keep focusing on having additional values on products and services to escalate the margins. “By taking advantages on innovation and technology in agriculture to optimize productivity and maintain cost competition while implementing sustainable production,” the representative said.

The company claimed there were palm oil supply issues in the 2024 first quarter namely because of the low seasonal harvest and the impact of El Nino in the third quarter of 2023.

“Though the supplies got decrease in phase in the next quarter, the progressive prospect could have the limit,” GAR said.

The company also mentioned the geopolitics and climate fluctuation would maintain uncertainty in vegetable oil sectors and would support CPO price until the rests of this year. (T2)

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