Golden Agri-Resources

[Musicwhiz]

Another rather hard to understand Income Statement! (See link below)

http://info.sgx.com/webcoranncatth.nsf/V...5001CFF37/$file/GAR09-28-02-2011-FY2010Results.pdf?openelement

If we removed the gain in fair value of biological assets for 4Q 2010 of US$1.37 billion, it means net profit was only US$76,000. And if this number was taken out of FY 2010 results, the Group would show a net loss!

I find myself unable to understand such financial statements, hence I choose the safe way - I avoid!

[corydorus]

I nearly bought 10 mins ago ... but cannot understand why price did not jump. Read the Financial Report again, spot it as well. Find it comical for them to present it that way.
Looks like you already saw it early.

[freedom]

should not put into P&L, put into Comprehensive income and balance sheet better.

[Musicwhiz]

Many companies mess up their Income Statement (on purpose?) by putting in such glaring one-off exceptional items. Maybe the aim is to mislead or obfuscate, but I tend to love stripping these things out to see what the "core" net profit is.

Oh and by the way, taxation is a very real expense, even if the Companies love using PBT as a measure of performance. I say - please use PAT, thank you.

[freedom]

it is not necessarily one-off. the fair valuation of its asset happens all the time. just sometime, it is negative; sometimes it is positive. it makes the P&L very volatile.

[Musicwhiz]

Mar 1, 2011
Golden Agri's Q4 gains soar to record $1.5b

PALM oil giant Golden Agri-Resources ended last year on a golden note.

Strong crude palm oil prices and the steady recovery of production helped drive its net profits to record highs.

Fourth-quarter net profits soared 147 per cent to US$1.17 billion (S$1.49 billion), on revenue of US$1.19 billion, which was 85 per cent higher than a year earlier.

Earnings for the full year ended Dec 31 were also more than double those in 2009, climbing 134 per cent to US$1.42 billion, while revenue for the same period rose 53 per cent to US$3.5 billion.

Fourth-quarter earnings per share were 10 US cents, up from just four US cents a year earlier. Net asset value per share was 56 US cents as at Dec 31, up from 45 US cents a year earlier.

The world's second largest palm oil producer said in a statement yesterday that the 2010 financial year was its best ever.

'Golden Agri has benefited from its consistent best-in-class plantation operations as well as the strong industry outlook, and this is demonstrated by our record performance in 2010,' said chairman and chief executive Franky Widjaja.

Although fourth-quarter output for palm oil products was 712,000 tonnes, which was 17 per cent more than the previous quarter and the highest on record for the firm, heavy rainfall in the earlier part of the year had dampened output for 2010 to 2.27 million tonnes, 3 per cent below the previous year's output.

But despite the unfavourable weather conditions, the firm still managed to expand its planted area by about 15,200ha, bringing its total planted area to 442,500ha at the end of the year.

Mr Widjaja said the firm's plantation management, sustainable and prudent business expansion plans, and healthy financial position mean it will be 'well-placed' to enjoy long-term growth in the palm oil industry.

'Demand for palm oil is expected to be robust, especially from large developing countries,' he added.

A final dividend of 0.77 Singapore cent, which is 56 per cent higher than last year's payout, has been proposed.

The company's shares closed 0.78 per cent higher at 65 Singapore cents yesterday.

FRANCIS CHAN

[Musicwhiz]

A punter's favourite.

Business Times - 14 May 2011

Golden Agri Q1 profit hits record US$230.7m

By FELDA CHAY

PALM plantation owner Golden Agri-Resources has reported a 160.6 per cent year-on-year surge in net profit for its first quarter to a record high of US$230.7 million on the back of higher average selling prices for its products and a jump in sales volume.

Earnings per share for the firm, in turn, rose to 1.9 US cents from 0.73 of a US cent a year ago, when the firm earned US$88.5 million, it said in a mid-day announcement.

Revenue for the three months ended March 31, 2011, climbed 134.3 per cent to US$1.5 billion from US$624.5 million.

The Indonesia-based, Singapore-listed company noted that the operating environment in China remains challenging in view of volatile commodity prices and the government's move to curb rises in food prices as it fights inflation.

'Our priority remains in managing our costs and targeting our growth in the sale of various palm-based products through our extended distribution channels,' said the company.

Still, it intends to expand its presence in China by constructing soya bean crushing facilities and a new vegetable oil refinery in the country. It plans to up its annual refining capacity there by 396,000 tonnes to 776,000 tonnes, and increase crushing capacity by 1.3 million tonnes to 2.3 million tonnes annually.

It is also looking to further develop its distribution channels to enter new areas in China.

Overall, Golden Agri believes that the fundamentals of the industry will remain strong.

'The developing consumption of edible oils and fats particularly by the growing middle class in highly populated emerging countries such as China, India and Pakistan, as well as increasing popularity of substitute and alternative uses of palm oil, will support the long-term global demand of palm oil.'

The company has earmarked US$450 million for capital expenditure for fiscal year 2011, and is looking to expand its palm oil plantations by 20,000 to 30,000 hectares.

As at end-March, Golden Agri held cash and cash equivalents of US$300.4 million, compared with US$156.7 million a year ago.

Net asset value per share cam to 58 US cents, up from 56 US cents as at end-December last year.

Yesterday, Golden Agri shares closed 0.75 per cent up at 67 cents. It was the second-most actively traded stock, with 116.4 million shares changing hands.

[mrEngineer]

Is this the reason why palm oil or bio fuels demand is so robust?

KLM to turn used cooking oil into aviation biofuel

AP – Wed, Jun 22, 2011

Dutch airline KLM plans to use recycled cooking oil as biofuel to power flights to and from France in a move aimed at cutting carbon emissions.

Starting in September, KLM will begin more than 200 flights between Paris and Amsterdam using biofuel made from used cooking oil, the company said Wednesday.

KLM managing director Camiel Eurlings said in a statement the airline does not have to make any changes to its aircraft engines to use the new biofuel. The biofuel flights are intended to help reduce KLM's carbon emissions while having a "minimum negative impact on biodiversity and food supply."

Air travel is responsible for about 3 percent of greenhouse gases, but their share of global emissions is rising rapidly.

The European Union told airlines earlier this year they would have to cut their carbon emissions by three percent on flights to the continent in 2012 to fall within new pollution limits.

The limit is designed to encourage airlines to reduce greenhouse gases that contribute to global warming by switching to cleaner fuels or economizing on fuel consumption with lighter aircraft or more efficient flight patterns.

Eurlings said he expects authorization to be granted soon for KLM's flights using the new fuel.

An Air France-KLM Boeing 747 using a 50 percent biofuel mix in one engine successfully completed a demonstration flight in the Netherlands in November 2009.

Forty people flew on the 90-minute trip, including the Dutch economic affairs minister, and the airlines said it was the first flight using biofuel to carry passengers. The plane had a 50-50 mix of biofuel and regular jet fuel in one of its four engines.

Virgin, Air New Zealand, Air Japan and Continental Airlines have previously completed similar demonstration flights using biofuel mixes.
...

[Greenrookie]

Hi folks,

Can anyone help me with this. Golden Agri set up a verdant fund a few years, golden Agri is the sole investor in the fund which owned the company golden veroleum, which is company that is given concession rights for building plantations in Liberia. My question is, where is the investment recorded under the financial report? It is not a subsidiary so it's not in the subsidiary list. How to track it's records?

The AR states clearly how it calculate fair value gains, using DCF for its plantations and using pare maters such as yields, production levels, CPO prices, costs etc. while I still have not managed to figure out how they calculate the values, I see some correlation with the profile of plantation and CPO prices, and if I am not wrong, it is likely that golden Agri will see some fair valuation loss in 2013 but should be migate by the increasing production and planting of new plantations.

I find golden Agri attractive as it is the only plantation play listed in Singapore that is trading at a discount to PB. 0.65 to be actual. Management track record for execution of business plan is quite good, as in what they plan, they execute. Eg. Increasing production, refining capabilities, increasing higher end product of palm oil instead if just crude palm oil. Their track records for raising funds from market is scary too, but the convertible bonds has a exercise price of 88 cents. I dun think I have to worry about that yet.

FCf is volatile but if u take the ave over a ten year period, it is positive. The dismal results seems to primarily driven by the fall in CPO prices, couple with increasing inventories. CpO prices has already fallen 40% from the peak. In its 25 years history, CPO price never fall more than 40% from its last peak. Inventories is falling over the past few quarters although still at elated levels, CPO seems to have bottom. Risk reward profile seem decent. Any comments anyone?

[BlueKelah]

First of all CPO prices can always fall further.

During the low of GFC 2009 you can see from the link it hit lows of ~RM1400. Now its lows of ~RM2300. if we take maybe ~RM1900 as a possible interim low given US and Japan printing money and causing global inflation, there is still another 17% to go down. if you wanna take RM1400 as the absolute 5 year low then there is another 40% down to go.

http://www.palmoilhq.com/palm-oil-prices/

So I would say now that its down can consider accumulate a bit of palm oil stocks.

China the main consumer keeps revising its GDP down and we dont know when their property bubble will pop. Imagine cooling measures hitting their GDP this year, what would happen to their GDP if bubbles there pop.