A fall in production has hit half-year profits at UK-listed palm oil processor New Britain Palm Oil.
CEO Nick Thompson said heavy rain made it harder to collect and transport fresh fruit bunches. The wet weather also meant the fruit absorbed more water, cutting extraction rates, Thompson noted.
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“The impact of lower fresh fruit bunches being processed coupled with lower extraction rates has resulted in total oils produced in the first half of 2012 falling by 26,438 tonnes compared to the same period last year,” Thompson said.
“As I have previously stated, the production of palm oil is largely a fixed cost business and hence a reduction in throughput impacts the group’s profitability. This factor together with lower average selling prices achieved and the significant year on year appreciation in the Papua New Guinea Kina against the US dollar by some 20% has negatively impacted the group’s results.”
New Britain Palm Oil, which is based in Papua New Guinea but also listed in London, reported net profit of US$45.9m for the six months to the end of June, compared to $89.6m a year earlier. Revenue fell from $403.9m to $366.1m.
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By GlobalData
