First Resources posts 16.1% drop in bottom line for Q3

FIRST Resources reported a 16.1 per cent slide in net profit to US$43.14 million for the third quarter ended Sept 30.

Revenue edged downwards by 2.8 per cent year on year to US$148.76 million on the back of lower average selling prices of crude palm oil and its refined products, which was partially offset by higher sales volumes from the refinery and processing segment. Earnings per share worked out to 2.72 US cents, down from 3.25 US cents previously.

Cost of sales rose 12.3 per cent to US$63.07 million. Higher costs were fuelled largely by the higher production and sales volumes, in addition to ramping up of operations at its biodiesel, refinery and kernel crushing plants.

Meanwhile, profit from operations for the quarter under review slipped 9 per cent to US$71.69 million.

"Palm oil prices have recovered from their recent lows in August 2014, partly as a result of lower than expected inventory levels in Malaysia and Indonesia. However, prices are expected to remain soft due to the weakening discretionary demand for biofuel caused by current narrow price spreads between crude oil and vegetable oils, as well as the sizeable on-going soybean harvest in the United States," the group warned.

It also said that it expects year-on-year volume growth to continue at a more moderate pace in Q4, following its production peak in Q3.