News » In Times of Higher Prices  
 
Wednesday, 30 April 2014
In Times of Higher Prices

 

Jakarta, 30 April 2014 – PT Sampoerna Agro Tbk and subsidiaries (“Sampoerna Agro" or “the Company”) released its financial and operational results for the period ending in 31 March 2014 (“1Q14”).

Global CPO commodity price traded in Malaysian markets, when measured in terms of quarterly average, has been strengthening steadily since the final quarter of 2012. In fact, the rate of increase has accelerated within the past two quarters to reach close to Rm2,700 per ton by 1Q14. This is 7% higher than average price in fourth quarter of 2013 (“4Q13”) or 16% higher versus first quarter of 2013 (“1Q13”). Management has an optimistic view that CPO market prices should sustain at about 15% premium versus last year’s performance.

Within 1Q14, Sampoerna Agro sold its CPO at an average price of Rp9,011 per kg, which meant 10% rise versus 4Q13 average or a robust 47% increase against 1Q13. As a result, revenue contribution from CPO in 1Q14 climbed 13% versus 1Q13 to reach Rp534.72 billion despite 23% lesser volume sold this year. CPO contributed 82% to total consolidated revenue for the Company that amounted to Rp649.63 billion in 1Q14, a rise of 13% against 1Q13 figure.

FFB harvest from the Company nucleus estates managed to book 13% rise in 1Q14 to reach 163,676 tons. However, total CPO output within the same period retreated 10% primarily due to lower contribution from external production which declined 36% year on year. Production growth booked during 1Q14 was wholly attributable to estates in the Kalimantan region that saw 35% increase while on the other hand, Sumatra region booked 31% lower volumes.

Notably though, production trend in 2014 have started to pick up in the month of March, unlike 2013 when it only picked up in July, or more visibly, in August. Therefore, management remained upbeat on this year’s volume growth especially considering that weather pattern in 2013 was mostly pleasant.

Following the receipt of International Sustainability & Carbon Certification (ISCC) certificates for couple of company subsidiaries late last year, Sampoerna Agro managed to engage in selling ISCC certified palm oil with premium pricing this year. The Company, through several of its subsidiaries, was also awarded the Indonesian Sustainable Palm Oil (ISPO) certification in February 2014.