Sipef (SIP) Q3 2024 earnings summary

Executive summary

• Solid results confirmed for 2024 despite a 9.0% year-to-date decline in palm oil production, mainly due to cyclical factors and the 2023 volcanic eruption in Papua New Guinea.

• Indonesian production saw a slight 0.2% decline, with growth in North and South Sumatra partially offsetting declines elsewhere.

• Banana production increased by 26.7% year-over-year, driven by expansion in Côte d'Ivoire.

• Group expects recurring annual result between USD 60 and 70 million, with limited net financial debt at year-end.

Financial highlights

• 82.0% of projected palm oil volumes sold at an average ex-mill gate price of USD 854 per tonne.

• Palm oil market prices ranged from USD 1,000 to 1,100 per tonne CIF Rotterdam in Q3.

• Banana sales benefited from stable prices and fixed-price contracts, supporting gross profit.

• Cash flow in 2024 supports both dividend payments and a capex program nearing USD 100 million.

Outlook and guidance

• Palm oil production in Indonesia expected to improve in Q4, but annual production likely to remain below 2023 due to lingering weather impacts.

• Papua New Guinea production to rebound in 2025 as recovery from volcanic eruption progresses.

• Banana production volumes expected to continue growing, with full development of new sites by Q1 2025.

• Palm oil market outlook remains positive, though premiums over other oils may not be sustained long-term.