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3 Things Investors Should Know About First Resources Ltd’s Latest Earnings

First Resources Ltd (SGX: EB5) is an integrated palm-oil producer. It manages more than 200,000 hectares of oil-palm plantations across the Riau, East Kalimantan, and West Kalimantan provinces of Indonesia.

In mid-August, First Resources reported its 2017 second quarter earnings. Let’s take a look at three useful pieces of information investors may want to know from the announcement:

1. The overall result

The following table shows some important numbers from First Resources’ income statement for the second quarters of 2017 and 2016:


Source: First Resources 2017 second quarter earnings presentation

We can see that First Resources’ revenue in the second quarter of 2017 was slightly lower compared to a year ago. Meanwhile, its net profit was down by 11.4% due to higher depreciation, unrealized losses on derivative financial instruments, and a big 46% increase in tax expense.

2. Segmental results

The table below shows the EBITDA (earnings before interest, taxes, depreciation, and amortisation) performance of First Resources’ two segments in the second quarters of 2017 and 2016:


Source: First Resources 2017 second quarter earnings presentation

It turns out that Plantations and Palm Oil Mills suffered a fall in EBITDA, whereas the Refinery and Processing segment enjoyed a turnaround in fortunes. First Resources’ overall EBITDA had increased in the second quarter of 2017 due to higher average selling prices of processed palm-based products.

3. Operational statistics

First Resources’ operational statistics are just as important as its financial numbers. Here’s a table showing the company’s plantation-related figures and the efficiency of its factory operations:


Source: First Resources 2017 second quarter earnings presentation

Nearly all of First Resources’ operational metrics in the second quarter of 2017 came in ahead of the second quarter of 2016. The company’s production and yields are strengthening from an increase in mature hectarage (mature plantations tend to produce more fruits on a per-hectare basis) and waning of the El Nino weather phenomenon.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.