New Britain Palm Oil Limited (NBPOL) has reported a $133.5m (£47.8m) drop in profits before tax in the last nine months compared to the previous year.
The Papua New Guinea-based producer of palm oil has published its third-quarter financial results for the nine months to 30 September, revealing a decline in sales to $528m (£331.7m), compared to total sales of $593.7m (£373m) during the same period last year.
In the nine months, the level of Crude Palm Oil (CPO) produced by the firm fell by 7.9% to 388,187 tonnes (t), as well as the production rate of Palm Kernel Oil (PKO) which decreased by 10.6% to 27,179t.
Nick Thompson, chief executive of NBPOL, said: “The first nine months of 2012 have been challenging for the company, with oil volumes down on the equivalent period in 2011 as a result of weather impacts earlier in the year, and has seen profitability impacted by both rising costs, in a large part due to currency effects, and falling CPO and PKO prices
“Palm oil prices remain depressed on the overhang of palm oil stocks in Malaysia. However, there are signs that these may have peaked and that lower production from Malaysia and Indonesia following their seasonal trough and higher exports due to palm oil’s price competitiveness may substantially lower the stocks in the coming months.”
He added that a strengthening of palm oil prices in the first half of the new year could occur if stocks draw down.
“Clearly the company is dependent on global market prices for our products and is continuing with our established forward selling strategy, where we believe it can deliver the best prices for the company. Looking forward, we remain encouraged by the significant land resources available to us, which in due course we expect to deliver volume growth for the group.”