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First Resources Ltd’s 2016 Annual Report: 19 Key Numbers to Size Up its Oil Palm Business

First Resources Ltd (SGX: EB5) released its 2016 annual report in late April.   

The Indonesian-based company cultivates oil palms, mills it to crude palm oil (CPO) and palm kernel (PK), and processes the CPO and PK into higher value products such as biodiesel. First Resources organises its business into two major segments: Plantations and Palm Oil Mills; and Refinery and Processing.

There is much more that we can learn from First Resource’s annual report. I picked out 19 key numbers that investors might want to know:

1. First Resources was founded 25 years ago in 1992. In 2007, about a decade ago, the oil-palm producer was listed on the Singapore stock exchange. Today, First Resources manages over 200,000 hectares of oil palm plantations. For perspective, one hectare is about the size of a rugby field.

2. In addition to its vast plantations, First Resources has 14 mills located in Sumatra and Kalimantan. The firm also has refining and biodiesel capacity of 850,000 tonnes per annum and kernel crushing capacity of 135,000 tonnes per annum. 

3. Oil palm plantations require a considerable amount of care. The process begins in nurseries with palm oil seeds. After the first year , the best seedlings are transferred to estates and designated as immature palms. Over the next three years , the immature palms undergo intensive upkeep before graduating to mature palm status.

4. For context, First Resources has 158,597 hectares of mature planted areas and 50,094 hectares of immature planted areas. From the mature planted areas, around 53,665 hectares are between four to seven years old (young), 53,546 hectares are between eight and 17 years old (prime) and 51,386 hectares are over 18 years old (past prime).  

5. Optimal ripeness is key to maximising the CPO output and yield. First Resources will only harvest the fresh fruit bunches (FBB) when an appropriate amount of fruitlets start detaching from the FBB. In 2016, First Resources extracted 16.8 tonnes per mature hectare in FFB, and 3.8 tonnes per mature hectare of CPO.        

6.  In total, First Resources produced 2.6 million tonnes of FFB, 634,941 tonnes of CPO, and 148,270 tonnes of PK.  

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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.