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Friday, February 24, 2017

Golden Agri-Resources sees 4Q earnings double to S$65 mil on higher revenue, forex gains

By Michele Zhu / theedgemarkets.com.sg | February 24, 2017 : 6:45 PM MYT

SINGAPORE (Feb 24): Golden Agri-Resources announced earnings of US$46.3 million (S$65 million) for the fourth quarter ended Dec 31 (4QFY16), more than double its 4QFY15 earnings of US$19.6 million, on higher revenue and forex gains.

For the full year (FY16), the palm oil company grew more than 38 times to US$399.6 million, from US$10.4 million in FY15.

In a Friday filing to SGX, the group said its strong performance for both the quarter and year under review was bolstered by its integrated business model and the appreciation of crude palm oil (CPO) market prices, which more than offset weaker palm product output.

Its earnings for both 4QFY16 and FY16 were further enhanced by deferred tax income arising from the increase in tax depreciable value of plantation assets.

Total revenue for the quarter grew 10.7% to US$7.2 billion, from US$6.5 billion a year earlier (4QFY15), after recording growth in revenue across all segments, particularly palm and laurics, which increased 11.5% to US$6.3 billion, from US$5.6 billion in the previous year, mainly attributable to higher sales volume and higher average net realised prices.

This was partially offset by a 3.4% revenue decline to S$186.7 million from the “others” segment, which comprises the production and distribution of food and consumer products in China and Indonesia.

For future tax benefit, the group says it revalued some of its plantation assets in Indonesia, which resulted in substantial deferred tax income contributing to its current bottom line. The net tax impact recorded from this revaluation was US$304 million for FY16, including US$62 million in 4Q.

Golden Agri-Resources also recorded a net foreign exchange (forex) gain of US$47.2 million in the current year (FY16), as compared to net loss of US$91.8 million in the previous year, mainly due to fair value gain on forward foreign currency contracts entered, to hedge the currency exposure of the Malaysian ringgit and Indonesia rupiah.

Total assets increased to US$8,306.4 million as at the end-2016, from US$8,035.7 million at end-Dec 2015, due to higher inventories and deferred tax assets.

On its outlook, the group said it expects its operating performance will continue being affected by the prices of CPO and competing seed oils, fluctuating foreign currency exchange rates and weather conditions.

Nonetheless, Golden Agri-Resources said it will continue optimising margins through further streamlining of its vertically-integrated operations, as well as improving its yield and cost efficiency.

Shares of Golden Agri-Resources closed flat at 45 Singaporean cents on Friday.

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