Two companies linked to haze report higher third-quarter net profits

Bumitama Agri and First Resources, two companies recently in the spotlight over regional haze, released their results for the third quarter and first nine months of this year on Friday (13 November).

Buoyed by its results, First Resources shares opened higher and continued to climb, closing up 6.45% at S$2.97.

First Resources’ underlying net profit rose 40% year on year to US$122.7 million (about S$158 million) in the third quarter. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased 26.6% to US$207.4 million, while revenue grew 24.9% to US$578.6 million.

Higher production, coupled with increased purchases of fresh fruit bunches (FFB) and palm oil products from third parties, drove a 36.5% rise in sales for the first nine months, from US$1.1372 billion a year earlier to US$1.5522 billion.

First Resources had a gross gearing ratio of 0.64 times and US$156.1 million in undrawn credit facilities.

In its third-quarter operating report, Bumitama Agri said that despite challenging weather conditions, its net profit rose 1.9% year on year to 614 billion rupiah (about S$43.2 million). EBITDA increased 1% to 1.22 trillion rupiah.

Third-quarter revenue grew 9.7% year on year to 4.2 trillion rupiah.

For the first nine months, improved productivity helped Bumitama Agri achieve net profit of 2.44 trillion rupiah, up 30.6% year on year, while revenue rose 20% to 16.33 trillion rupiah. EBITDA increased 25.5% to 4.72 trillion rupiah, with its EBITDA margin rising from 27.6% a year earlier to 28.9%.

The company’s fresh fruit bunch production for the first nine months rose 13% year on year to 2.88 million tonnes. Fresh fruit bunch yields also increased 15%, from 14.4 tonnes per hectare to 16.5 tonnes.

The oil extraction rate (OER) increased to 22.6%, while crude palm oil (CPO) production rose 12% year on year to 1.04 million tonnes.

Looking ahead, elevated energy prices, policy-driven demand for rapeseed oil and limited growth in palm oil supply could support palm oil fundamentals in the period before 2027.

Both companies also reaffirmed their commitment to implementing their “zero-burning” policies and continuing to cooperate with the relevant authorities in Indonesia and Singapore.

Bumitama Agri shares were unchanged at S$1.39.