Golden Agri-Resources Ltd. (GGR), the world’s second-largest oil-palm planter, said first-quarter profit fell 30 percent as prices of the tropical oil used in food and fuel declined and fertilizer costs surged.
Group net income dropped to $162 million in the three months ended March 31 from $230.7 million a year earlier, the Singapore-based company said today in a statement. Revenue rose 4 percent to $1.5 billion.
Golden Agri, 50 percent owned by Indonesia’s Widjaja family, follows Wilmar International Ltd. (WIL) in reporting lower profit amid volatile commodity prices and rising costs. Palm oil, used in everything from candy bars to biofuel, averaged 3,254.20 ringgit ($1,059) a metric ton in the quarter, about 10 percent lower than a year earlier.
“The operating environment of the China agri-business remains challenging given the high volatility in raw material prices and intense competition,” Golden Agri said in the statement. “We will continue to focus on managing our costs and targeting our growth in the sale of various palm-based products through our extended distribution channels.”
Cost of sales increased 14 percent to $1.1 billion in the quarter from a year earlier.
Golden Agri shares were unchanged at 69.5 cents at the close in Singapore. The stock has fallen 2.8 percent this year, compared with a 9 percent gain the benchmark Straits Times Index. The earnings were announced after market hours.
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