Global Palm Resources

Email This Print This

UNAUDITED FINANCIAL STATEMENT ANNOUNCEMENT FOR THE FINANCIAL PERIOD FROM 1 JANUARY 2019 TO 30 SEPTEMBER 2019

Financials Archive

Get Adobe Reader Note: Files are in Adobe (PDF) format.
Please download the free Adobe Acrobat Reader to view these documents.

Profit & Loss

Profit & Loss

Other comprehensive income

Balance Sheet

Balance Sheet

Review of Group performance

3Q2019 versus 3Q2018

Revenue

The Group's revenue for 3Q2019 increased Rp19.0 billion or 29%, from Rp64.8 billion in 3Q2018 to Rp83.8 billion in 3Q2019, mainly contributed by increase in sales volume of crude palm oil ("CPO") and palm kernel ("PK"). Revenue from CPO and PK increased Rp14.3 billon and Rp4.6 billion respectively as compared to 3Q2018.

The increase in CPO sales revenue of Rp14.3 billion or 24%, from Rp60.6 billion in 3Q2018 to Rp74.9 billion in 3Q2019, was mainly contributed by an increase in CPO sales volume from 9,006 tonnes (3Q2018) to 12,004 tonnes (3Q2019). This represented an increase of 131% in CPO sales revenue for 3Q2019. However, the decrease in CPO average selling price from Rp6,724/kg (3Q2018) to Rp6,238/kg (3Q2019) offset the 3Q2019 CPO sales revenue by 31%.

The increase in PK sales revenue of Rp4.7 billion or 110%, from Rp4.2 billion in 3Q2018 to Rp8.9 billion in 3Q2019, was mainly contributed by an increase in PK sales volume from 1,000 tones (3Q2018) to 3,116 tonnes (3Q2019). This represented an increase of 130% in PK sales revenue for 3Q2019. However, the decrease in PK average selling price from Rp4,225/kg (3Q2018) to Rp2,845/kg (3Q2019) offset the 3Q2019 PK sales revenue by 30%.

The increase in sales volume was mainly from the sell-down of inventory brought forward from 1H2019, offset by lower production from the implementation of the Group's replanting program.

Costs of sales

Cost of sales increased by Rp21.2 billion or 37%, from Rp57.7 billion in 3Q2018 to Rp78.9 billion in 3Q2019. This was mainly attributable to the increase in CPO sales volume in 3Q2019.

Gross profit

As a result of the foregoing, gross profit decreased by Rp2.2 billion or 31% from Rp7.1 billion in 3Q2018 to Rp4.9 billion in 3Q2019. Gross profit margin decreased by 5.1% from 10.9% in 3Q2018 to 5.8% in 3Q2019.

Distribution expenses

Distribution expenses increased by Rp0.4 billion or 552% from Rp0.1 billion (3Q2018) to Rp0.5 billion (3Q2019). This was mainly due to the increase in freight and stevedoring costs of Rp0.4 billion, as there were some PK which was sold CIF to the loading port of Pontianak in 3Q2019 while PK was sold FOB from the plantation's bulk storage warehouse in Matan in 3Q2018.

Administrative expenses

Administrative expenses increased Rp0.3 billion or 3%, from Rp9.8 billion (3Q2018) to Rp10.1 billion (3Q2019). The was mainly due to increase in levy and contribution costs of Rp0.1 billion and depreciation expenses of Rp0.2 billion. The increase in depreciation expense was due to the adoption of SFRS(I) 16 Leases with effect from 1 January 2019.

Finance costs

Finance cost increased by Rp0.2 billion mainly due to the adoption of SFRS(I) 16 Leases with effect from 1 January 2019.

Interest income

Interest income decreased by Rp0.8 billion or 35%, from Rp2.3 billion (3Q2018) to Rp1.5 billion (3Q2019). This was mainly due to decrease in interest earned from bank deposits of Rp0.6 billion attributable to the decrease in cash and cash equivalents. Interest earned from the plasma plantation receivables decreased by Rp0.2 billion from Rp1.2 billion (3Q2018) to Rp1.0 billion (3Q2019).

Other income

Other income increased by Rp0.3 billion in 3Q2019 was mainly due to increase in fair value gain from financial assets at fair value through profit or loss of Rp0.2 billion and gain on disposal of matured plantation under the Plasma program of Rp0.4 billion. This was offset by a decrease in insurance claim of Rp0.3 billion.

Other expenses

Other expenses remained stable at Rp0.3 billion in both 3Q2019 and 3Q2018.

Foreign exchange gain, net

Net foreign exchange gain of Rp2.7 billion in 3Q2019 was mainly due to the appreciation of IDR and USD against SGD in relation to the Company's IDR and USD bank balances held as well as the IDR denominated inter-company non-working capital financing for its subsidiary.

(Loss)/profit before income tax

As a result of the foregoing, loss before income tax decreased by Rp0.8 billion or 36%, from Rp2.3 billion in 3Q2018 to Rp1.5 billion in 3Q2019.

Income tax expense

Income tax expense decreased by Rp0.5 billion to decrease in deferred tax liability in 3Q2019.

(Loss)/profit after income tax

As a result of the above, loss after income tax decreased by Rp1.3 billion or 46%, from Rp2.9 billion in 3Q2018 to Rp1.6 billion in 3Q2019.

9M2019 versus 9M2018

Revenue

The Group's revenue for 9M2019 decreased by Rp38.9 billion or 16%, from Rp245.3 billion in 9M2018 to Rp206.4 billion in 9M2019, mainly contributed by decrease in CPO sales volume and average selling price and PK average selling price, offset by an increase in PK sales volume. Revenue from CPO and PK decreased Rp34.8 billon and Rp4.1 billion respectively as compared to 9M2018.

The decrease in CPO sales revenue of Rp34.7 billion or 16%, from Rp218.6 billion in 9M2018 to Rp183.9 billion in 9M2019, was mainly attributable to a decrease in CPO sales volume and average selling price. CPO sales volume decreased from 30,018 tonnes (9M2018) to 29,016 tonnes (9M2019). This contributed to a decrease of 18% in CPO sales revenue for 9M2019. CPO average selling price decreased from Rp7,283/kg (9M2018) to Rp6,337/kg (9M2019) and this contributed to a decrease of 82% in CPO sales revenue for 9M2019.

The decrease in PK sales revenue of Rp4.1 billion or 15%, from Rp26.7 billion in 9M2018 to Rp22.6 billion in 9M2019, was mainly attributable to a decrease in PK average selling price, offset by an increase in PK sales volume. PK average selling price decreased from Rp5,344/kg (9M2018) to Rp3,065/kg (9M2019) and this contributed to a decrease of 276% in PK sales revenue for 9M2019. This was offset by increase in PK sales volume from 5,000 tonnes (9M2018) to 7,371 tonnes (9M2019), which contributed to an increase of 176% in PK sales revenue for 9M2019.

The decrease in sales revenue is mainly due to unfavourable market conditions coupled with lower production from the implementation of the Group's replanting program.

Costs of sales

Cost of sales decreased by Rp2.1 billion or 1%, from Rp209.5 billion in 9M2018 to Rp207.4 billion in 9M2019. This was mainly attributable to the decrease in CPO sales volume in 9M2019.

Gross (loss)/profit

As a result of the foregoing, the Group incurred a gross loss of Rp0.9 billion in 9M2019, as compared to a gross profit of Rp35.8 billion in 9M2018. Gross profit margin decreased by 15.1% from 14.6% in 9M2018 to gross loss margin of 0.5% in 9M2019.

Distribution expenses

Distribution expenses increased by Rp0.4 billion or 88% from Rp0.4 billion (9M2018) to Rp0.8 billion (9M2019). This was mainly due to the increase in freight and stevedoring costs of Rp0.4 billion, as there were some PK which was sold CIF to the loading port of Pontianak in 9M2019 while PK was sold FOB from the plantation's bulk storage warehouse in Matan in 9M2018.

Administrative expenses

Administrative expenses decreased Rp1.5 billion or 5% from Rp33.2 billion in 9M2018 to Rp31.7 billion in 9M2019. The was mainly due to decrease in salaries and wages for the Group of Rp2.3 billion and offset by increase in depreciation expenses of Rp0.5 billion in 9M2019. The increase in depreciation expense was due to the adoption of SFRS(I) 16 Leases with effect from 1 January 2019.

Finance costs

Finance cost increased by Rp0.6 billion mainly due to the adoption of SFRS(I) 16 Leases with effect from 1 January 2019.

Interest income

Interest income decreased by Rp2.4 billion or 30%, from Rp8.0 billion (9M2018) to Rp5.6 billion (9M2019). This was mainly due to decrease in interest earned from bank deposits of Rp1.8 billion attributable to the decrease in cash and cash equivalents. Interest earned from the plasma plantation receivables decreased by Rp0.6 billion from Rp3.9 billion (9M2018) to Rp3.3 billion (9M2019).

Other income

Other income increased by Rp2.8 billion or 270% from Rp1.0 billion in 9M2018 to Rp3.8 billion in 9M2019. This was mainly due to increase in sales of sludge oil of Rp2.8 billion in 9M2019.

Other expenses

Other expenses decreased by Rp2.0 billion or 63%, as there was no loss allowance made in 2019 for impairment of plasma receivables compared to a loss allowance for impairment of plasma receivables of Rp1.1 billion in 9M2018. There was also a decrease in land application expenses of Rp1.5 billion in 9M2019. The decrease was offset by an increase in areal survey expenses of Rp0.2 billion and increase in fixed assets written-off of Rp0.2 billion in 9M2019.

Foreign exchange gain/(loss), net

Net foreign exchange gain of Rp3.0 billion in 9M2019 was mainly due to the appreciation of IDR and USD against SGD in relation to the Company's IDR and USD bank balances held as well as the IDR denominated inter-company non-working capital financing for its subsidiary.

(Loss)/profit before income tax

As a result of the foregoing, the Group incurred a loss before income tax of Rp22.8 billion in 9M2019, compared to a profit before income tax of Rp3.7 billion in 9M2018.

Income tax expense

Income tax expense decreased by Rp2.2 billion mainly due to the lower profit generated.

(Loss)/profit after income tax

As a result of the above, the Group incurred a loss after income tax of Rp23.6 billion in 9M2019 compared to a profit after income tax of Rp0.7 billion in 9M2018.

Review of Financial Position as at 30 September 2019

Non-current assets

Non-current assets for the Group increased by Rp49.8 billion or 16%, from Rp309.7 billion as at 31 December 2018 to Rp359.5 billion as at 30 September 2019. This was mainly due to increase in deferred charges of Rp25.1 billion which resulted from the acquisition of PT Bumi Raya Agro in 9M2019. There was also an increase in bearer plants of Rp10.1 billion, increase in property, plant and equipment of Rp7.1 billion, and increase in the credit extended to the Plasma farmers for the biological assets transferred of Rp6.9 billion.

Current assets

Current assets for the Group decreased by Rp77.6 billion or 19%, from Rp415.0 billion as at 31 December 2018 to Rp337.4 billion as at 30 September 2019. This was mainly due to the decrease in inventories of Rp29.4 billion from lower production in 9M2019, decrease in trade and other receivables of Rp27.9 billion and decrease in cash and cash equivalents of Rp23.1 billion. The decrease in cash and cash equivalents was mainly due to the acquisition of PT Bumi Raya Agro for the purchase consideration of Rp23.6 billion and lower profit generated in 9M2019. This was offset by an increase in income tax recoverable of Rp3.8 billion in 9M2019.

Current liabilities

Current liabilities for the Group increased by Rp6.7 billion or 21%, from Rp32.2 billion as at 31 December 2018 to Rp38.9 billion as at 30 September 2019. This was mainly due to increase in trade and other payable of Rp7.7 billion offset by a decrease in income tax payable of Rp1.3 billion in 9M2019.

Non-current liabilities

Non-current liabilities for the Group decreased by Rp0.7 billion or 2% from Rp39.7 billion as at 31 December 2018 to Rp39.0 billion as at 30 September 2019, mainly due to decrease in provision for post-employment benefits of Rp2.1 billion. This was offset by increase in lease liabilities of Rp0.7 billion with the adoption of SFRS(I) 16 Leases, increase in finance lease payables of Rp0.5 billion and increase in deferred tax liabilities of Rp0.2 billion.

Accumulated losses

The accumulated losses of Rp163.2 billion was mainly contributed by the accumulated losses of Rp141.0 billion brought forward from FY2018, and loss attributable to owners of the parent of Rp22.2 billion in 9M2019.

Review of Consolidated Cash Flows

Net cash generated from operating activities of Rp16.0 billion in 9M2019 was mainly due to the sell-down of inventories from FY2018 of Rp29.4 billion, increase in trade and other payables of Rp7.7 billion. This was offset by operating cash flows used before working capital changes of Rp17.8 billion in 9M2019, increase in income tax recoverable of Rp3.7 billion payment of income tax payable of Rp1.3 billion.

Net cash used in investing activities of Rp43.0 billion in 9M2019 was mainly due to the capital expenditure on bearer plants of Rp16.1 billion, cash paid for acquisition of PT Bumi Raya Agro (net of cash acquired) of Rp12.8 billion and purchases of property, plant and equipment of Rp15.9 billion. This was offset by receipt from disposal of financial assets at fair value through profit or loss of Rp1.8 billion in 9M2019.

Net cash used in financing activities of Rp1.9 billion in 9M2019 was mainly due to the buyback of the Company's shares to be held as treasury shares of Rp0.8 billion, repayment of lease liabilities and lease liabilities interest of Rp0.8 billion and repayment of obligations under finance leases of Rp0.2 billion.

Commentary On Current Year Prospects

CPO prices have increased by about 45% from its recent low, supported by less than anticipated increases in supply and a significant increase in demand in 2020, as Indonesia implements the B30 mandatory biodiesel policy. This new supply and demand conditions are expected to have a positive impact on CPO prices in 2020.

The Group will continue the replanting of older palm trees with newer breed of higher-yielding palm trees to ensure long-term sustainability for the Group. We expect production of CPO and kernel to drop for the next few years due to the replanting program. The management expects to see higher yield per hectare when the replanted palm trees reach maturity. This together with the management continuous effort to increase productivity, should result in a positive sustainable future for the Group.