* Q2 net profit falls 40 pct to $27 mln
* To review strategic alternatives for oilseed unit
* Results hit by palm oil refining, oilseeds businesses
(Adds details, comments)
By Rujun Shen
SINGAPORE, Aug 14 Palm oil producer Golden
Agri-Resources Ltd said net profit dropped 40 percent
to a five-year low in the second quarter from a year ago, citing
poor performance in its palm oil refining and oilseeds units.
The world's second-largest palm oil plantation operator by
acreage on Thursday posted a net profit of $27 million for the
three months ended June 30, the lowest quarterly net profit
since the first quarter of 2009 according to Thomson Reuters
For the first half of the year, net profit fell 17 percent
to $131 million, even while revenue grew 27 percent during the
period, Golden Agri said in a statement.
Its palm and laurics business, which processes crude palm
oil and is the biggest revenue generator, registered a 41
percent jump in revenue for the first half of the year, but
earnings before interest, tax, depreciation and amortisation
(EBITDA) slumped 62 percent due to lower refining margins.
An improvement in the palm oil price in the quarter helped
boost the results of companies that focus on the plantation
business, but companies with refining operations came under
pressure from rapidly growing refining capacity in Indonesia.
Golden Agri's oilseeds segment swung to a loss of $43
million in the first half from EBITDA of $6.9 million a year
earlier as the company processed smaller amounts of soybeans,
reducing utilisation of its facilities in China to manage costs.
In China, a combination of lower demand and oversupply led
to a negative crush margin for many companies early in the year.
The company plans to review the business model and the
strategic alternatives for its oilseed business, including
finding favourable pricing formulae for processing seed for
clients, Chief Financial Officer Rafael Concepcion said.
"In terms of a potential response the company may do, that
will include further review of capacity utilisation. This is
something that we are exploring right now," he told reporters at
a press briefing.
He added that China remained a major oilseed market, which
would be taken into consideration in making the decision.
In contrast to the poor performance in oilseeds and palm oil
refining units, the plantation segment showed strong growth in
both revenue and profit, buoyed by high crude palm oil prices.
The company declared no dividend for the period.
(Additional reporting by Tripti Karlo in BANGALORE; editing by