Palm oil, wood products, and renewable energy company PT Dharma Satya Nusantara (DSNG) booked profit of Rp868 billion (US$55 million) in third quarter of 2024.
The profit is an increase of 72 percent year on year (YoY) with palm oil segments still become main contributor of the company ’s income, contributing around 86 percent from total revenue. The increase in profit is encouraged by the increase in sales for 9 percent YoY, reaching Rp 7.2 trillion (US$456 million) from Rp 6.6 trillion (US$418 million) previously, as well as lower fertilizer prices that has contributed positively to cost efficiency.
Therefore, Earnings before interest, taxes, depreciation, and amortization (EBITDA) was recorded to grow by 34 percent YoY to become Rp2.1 trillion (US$133 million).
The positive performance is supported by increased average selling price (ASP) for Crude Palm Oil (CPO), Palm Kernel and Palm Kernel Oil , by 8 percent, 28.2 percent and 22.2 percent respectively YoY, with price reaching Rp 12,421 /kg for CPO, Rp 6,559 /kg for palm kernel and Rp 16,014 /kg for palm kernel oil (PKO) .
Besides, revenue from panel wood products shows improvement with 13.2 percent incrase, reaching Rp 503 billion or US$ 32 million due to better sales volume by capturing wood market opportunity left by competitors during global economic pressure last year.
“Until the end of 2023, we have conducted replanting by removing 675 hectares less productive palm oil trees and replanting 500 hectares to make sure that our plantations have prime age condition,” Andrianto Oetomo, Chief Executive Officer of Dharma Satya Nusantara, said in a statement on Wednesday, October 30, 2024.
Renewable Energy segment also contributed through palm kernel shell with Rp162 billion (US$10 million) in revenue. The commodity is one of the main export product that is shipped to Japan in collaboration with Erex Singapore Pte. Ltd. Until this quarter, DSNG has exported 84 thousands ton of palm kernel shell.
In terms of production side, the number of Fresh Fruit Bunches that are produced by palm oil segments at third quarter of 2024 decreased 5.1 percent YoY from 1.64 million tons to 1.56 million tons. The decline is in line with production decline experience by palm oil industry , mainly caused by impact of dry weather that occurred since last year, mainly in West Kalimantan and Central Kalimantan.
In addition, yield recovery tend to stop during 2024, resulting in a slowdown in industrial CPO output growth. Nevertheless, throughout 2024, the company managed to record an increase in the Oil Extraction Rate (OER) which was around 24 percent. Until the third quarter of 2024, the OER increased by 4.9 percent YoY, from 22.93 percent to 24.04 percent. In addition, the free fatty acid (FFA) level reached 2.84 percent, better than the standard limit of 3 percent, making the CPO produced premium quality.
Overall, DSNG’s financial performance in Q3-2024 reflected a solid financial position, with total assets reaching Rp17.4 trillion (US$1.1 billion), up 7.8 percent YoY. The company’s liabilities were recorded at Rp7.8 trillion (US$493 million), while equity reached Rp9.6 trillion (US$607 million).
