Golden Agri-Resources (E5H) H1 2024 earnings summary

Executive summary

• Revenue increased 5.4% year-over-year to $5.14 billion, driven by higher sales volume and strong downstream performance despite lower CPO prices.

• EBITDA rose 4% to $495 million, with margins of 23.4% in upstream and 5.5% in downstream segments.

• Underlying profit declined 14% to $189 million due to higher financing expenses in a high-interest environment.

• Net profit attributable to owners dropped 43.8% year-over-year to $102.4 million, mainly due to unrealized FX losses from rupiah depreciation and higher financial expenses.

• No interim dividend declared for the half year ended 30 June 2024.

Financial highlights

• Gross profit grew 4.3% year-over-year to $920 million.

• Net debt increased 35% to $529 million, but financial ratios remain strong: debt/equity at 0.61x, net debt/EBITDA at 0.53x, and EBITDA/interest at 4.18x.

• Palm product output fell 9% to 1.2 million tons, impacted by El Niño drought and accelerated replanting.

• Downstream revenue up 5% to $5.09 billion and sales volume up 11% to 5.7 million tons.

• Net cash from operating activities declined to $93.1 million from $262.8 million in 1H2023.

Outlook and guidance

• Expectation of continued improvement in plantation outputs in the second half.

• Industry outlook remains positive with tight supply and accelerating demand, especially from biofuel and food sectors.

• Targeting 20,000 hectares of replanting for the full year.

• Capital expenditure planned up to $300 million, with focus on replanting, downstream expansion, and sustainability initiatives.

• The group will focus on operational efficiency, technological innovation, and sustainability.