PALMOILMAGAZINE, SINGAPORE – Kencana Agri Limited (Kencana or the Group) reported its financial results for the period ending June 30, 2024. Despite a 12% drop in revenue compared to the same period last year, several key factors impacted the Group’s performance.
The revenue decline was mainly due to lower average selling prices (ASP) for crude palm oil (CPO) and palm kernel (PK). In the first half of 2024 (1H24), the ASP for CPO was US$706 per metric ton (MT), a 12% decrease from US$798 per MT in 1H23. Similarly, the ASP for PK fell from US$407 per MT in 1H23 to US$384 per MT in 1H24. However, an increase in PK sales volume by 5%—from 13,047 MT in 1H23 to 13,715 MT in 1H24—helped to offset this impact, while CPO sales volume remained steady year-over-year.
In an official statement to Palmoilmagazine.com, the Group also reported a 22% reduction in selling costs, from US$51.9 million to US$40.2 million in 1H24, boosting the gross profit margin from 16% to 26%. This cost reduction was attributed to lower expenses in nursery operations and a more moderate use of fertilizer compared to the previous year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) reached US$2.2 million, while income tax expenses were US$1.6 million, slightly above Indonesia’s standard corporate tax rate of 22%.
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However, the Group’s net profit dropped by 70% from US$1.9 million in 1H23 to US$0.6 million in 1H24. This decline was largely due to a foreign exchange loss of US$2.1 million, stemming from bank loans denominated in U.S. dollars, as the Indonesian rupiah depreciated by 7% against the dollar during the period.
The current assets of the group got increased US$ 6,0 million to be US$ 88,5 million on 30 June 2024 namely happened for the increasing supply. The non-current assets of the company got decreased US$ 14,4 million, namely happened for the loss of foreign exchange translation and the mature plant depreciation.
Chairman of Kencana, Henry Maknawi said that CPO price in 1H24 was relatively stable even though the global scale – demands got decreased by the supply issue because of dry season. (P2)
