Half year results of the SIPEF group per 30 June 2018
- Palm oil production at our own plantations rose by 6.7% compared with the first half of last year, with a sharp
rise in palm oil volumes in Indonesia (+10.4%) and the fall in production in the first quarter in Papua New
Guinea was offset in full.
- Stable but weaker palm oil market that currently quotes below USD 600 per tonne
- Despite rising volumes and efficiency improvements, the lower prices for palm oil and rubber on the world
markets reduced the gross profit from KUSD 57 472 in June 2017 to KUSD 47 008 (-18.2%) in June 2018.
- Due to some non-operational elements such as negative exchange- (-KUSD 1 439) and tax effects (-KUSD
1 507), the net result, share of the Group, excluding one-off gains, was KUSD 17 391, which was 46.1% lower
than in 2017.
- Sale of the insurance activity BDM-ASCO was finalised in June with a one-off gain of
KUSD 7 380.
- As a result of the expected higher production volumes and the related lower unit cost prices for palm oil, the
recurring profit for the second semester should exceed the recurring profit for the first semester.
- With 66% of 2018 palm oil production sold at USD 715 per tonne CIF Rotterdam, premiums included, and the
world market trend indicating little prospect of a quick revival in the second half of the year, we expect the
recurring result for 2018 to be substantially lower than for 2017.
- Expansion in South Sumatra, Indonesia continued steadily with already 9 749 hectares cultivated in Musi
Rawas and the start of the limited expansion and replanting of Dendymarker.