February 27, 2018 / 4:13 AM / in a year

UPDATE 1-Golden Agri Q4 underlying profit falls 44 pct on output, price declines

* Q4 revenue falls 10 pct

* Q4 net loss, incl non-operating items, is $29 mln

* Expects plantation output to rise in 2018 (Adds comments from briefing)

SINGAPORE, Feb 27 (Reuters) - Singapore-listed palm oil company Golden Agri-Resources Ltd’s fourth-quarter underlying profit fell 44 percent from the same period a year ago and revenue declined as production volume and crude palm oil prices dropped.

The company, whose plantations are located in Indonesia, posted an underlying profit, which excludes non-operating items, of $37 million for the three month period ending in December, compared with $66 million a year ago. Full-year underlying profit rose 36 percent to $254 million.

Quarterly revenue fell 10 percent. Fourth-quarter 2017 crude palm oil (CPO) production fell 26 percent from the prior year quarter, which the company attributed to a large base effect after a sharp gain in fourth-quarter 2016 production as palm growth rebounded from the 2015 El Nino weather phenomenon that caused drought conditions in Southeast Asia.

Full-year 2017 CPO output rose 8 percent versus 2016.

Including an impairment loss on China assets and other non-operating items, Golden Agri posted a net loss of $29 million in the fourth quarter. Last year, it agreed to sell its oilseed crushing and vegetable oil refining business in China to global trading house Louis Dreyfus Co.

Full-year 2017 net profit was $74 million, down 81 percent from a year ago.

Golden Agri’s 2018 plantation output may rise faster than a forecast 8 percent to 9 percent increase for the broader industry, Franky Widjaja, the company’s chairman and chief executive officer, told reporters at the company’s results briefing.

He said palm oil prices are expected to stabilise and to improve by $50 to $80 per tonne this year, citing industry consensus.

Earlier this year, European Union lawmakers unveiled draft rules that included banning palm oil in motor fuels from 2021.

Widjaja said that while there was little effect on demand from the potential ban currently, the industry was worried about the impact beyond 2020.

Europe accounts for 15 percent of the company’s exports, Golden Agri said, and is used for purposes beyond biofuels, such as food production.

Shares of the company were unchanged at 36 Singapore cents at the mid-day halt in trading after falling earlier and are down 2.7 percent for the year-to-date. (Reporting by Aradhana Aravindan; Editing by Richard Pullin and Christian Schmollinger)

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