First Resources Ltd’s Latest Earnings: Better Results All Round for 2016

First Resources Ltd (SGX: EB5) reported its 2016 fourth quarter and full year earnings yesterday.

As a quick background, First Resources is a producer of palm oil and it organises its business into two major segments: Plantations and Palm Oil Mills; and Refinery and Processing.

You catch the results from the company’s previous quarter here.

Financial highlights

The following’s a rundown on some of First Resources’ latest financial figures:

  1. Revenue for First Resources in the fourth quarter was up 34% year-on-year, coming in at US$175.2 million. For 2016, First Resources reported US$575.2 million in revenue, up 26.8% from 2015. Do note that First Resources’ numbers in 2015 were restated.
  2. For the fourth quarter of 2016, net profit attributable to shareholders was US$58.0 million, up 223.7% year-on-year. For the full year, net profit was US$125.4 million, representing a 31.1% increase from 2015.
  3. Earnings per share (EPS) was US$0.0366 in the reporting quarter, up a good deal from the US$0.0113 made in the fourth quarter of 2015. For 2016, First Resources recorded US$0.0791 in EPS, up from 2015’s US$0.0604.
  4. Cash flow from operations came in at US$60.7 million for 2016’s fourth-quarter with capital expenditure clocking in at US$19.2 million. This led to free cash flow of US$41.5 million for the reporting quarter. For 2016, First Resources had US$114.4 million in free cash flow.
  5. As of 31 December 2016, First Resources had US$258.2 million in cash and bank balances (note: a sum of US$150.3 million is earmarked as restricted) and US$447.9 million in debt. This is an improvement from end-2015 when there was US$205.4 million in cash and bank balances and US$495 million in debt recorded at the end of last year.

In all, First Resources closed 2016 with solid gains in revenue and profit. The oil palm producer also capped the year with positive free cash flow and a marked improvement in its balance sheet.

The board proposed a final dividend of S$0.02375 per share, a sharp increase compared to 2015’s final dividend of S$0.0125 per share. Together with 2016’s interim dividend of S$0.00625, First Resources will be paying out a total of S$0.03 per share for 2016, up from 2015’s dividend S$0.025 per share.

Operational highlights

Revenue for the Plantations and Palm Oil Mills segment increased by 12.4% to US$473.9 million in 2016. Elsewhere, the refinery and processing segment delivered a 72.4% increase in revenue for 2016, recording US$498.4 million for the year.

First Resources’ chief executive Ciliandra Fangiono, shared the following comments in the earnings release on the company’s future:

“Although palm oil prices have moderated in recent weeks, continued low inventories in both producing and importing countries should continue to provide some support to prices. In the longer-term, the Indonesian biodiesel mandate and underlying demand growth from emerging markets will continue to underpin the positive outlook of the palm oil industry.”

At its closing share price of S$1.87 on Monday, First Resources traded at 16.9 times trailing earnings and has a trailing dividend yield of 1.6%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.