InfoSAWIT, SINGAPORE – Golden Agri-Resources Ltd (GAR) achieved a solid performance in the first half of 2024, recording a 5% increase in revenue to US$ 5.14 billion compared to the same period last year. Despite a slight decline in crude palm oil (CPO) prices, GAR expanded its sales volume, positively contributing to the company’s overall revenue.
GAR’s EBITDA stood at US$ 495 million, with a margin close to 10%, although net income and underlying profit decreased to US$ 102 million and US$ 189 million, respectively. This decline was primarily attributed to higher finance costs and unrealized foreign exchange losses. Nevertheless, GAR’s financial performance showed improvement from the previous quarter, driven by higher plantation output.
GAR’s Chairman and CEO, Franky O. Widjaja, emphasized the company’s commitment to enhancing profitability through the development of value-added products and cost-efficiency improvements. "GAR is focused on long-term output enhancement, cost efficiency, and the development of value-added products. This strategic approach will ensure GAR continues to create value amid the dynamic challenges of the industry," said Franky in a press release cited by InfoSAWIT on Friday (15/11/2024).
Franky also highlighted the impact of extreme El Niño weather conditions since 2023 on palm oil production in Indonesia, as well as the global geopolitical challenges affecting logistics and economic stability. "We continue to monitor these developments, as these factors could impact operations and CPO price trends in the future," he added.
By the end of June 2024, GAR had a total planted area of nearly 534,000 hectares, with 92% of the area being producing land, including 116,000 hectares of plasma plantations. The company accelerated replanting activities, reaching 10,800 hectares in the first half of 2024, a 66% increase compared to the same period last year. This initiative is part of the company’s efforts to maintain the average age of GAR’s core area at 15.5 years, supporting its yield intensification program.
GAR harvested approximately 4 million tons of fresh fruit bunches (FFB) in the first half of 2024, down from 4.4 million tons in the same period last year due to extreme El Niño weather conditions. Palm oil production also decreased by 9% to 1.21 million tons. Despite this, EBITDA from the plantation segment remained strong at US$ 213 million with a 23.4% margin, supported by lower production costs through strategic procurement decisions and reduced fertilizer prices.
In the downstream segment, GAR recorded an 11% expansion in sales to 5.7 million tons in the first half of 2024, with revenue reaching US$ 5.09 billion. This segment generated an EBITDA of US$ 282 million with a 5.5% margin, contributing 57% of the company’s total EBITDA. Expanding value-added downstream products has become a key strategy for GAR to drive growth. (T2)
