Indonesia's Astra Agro 1H net profit up 65 percent

Indonesia's largest listed plantation company, PT Astra Agro Lestari Tbk , said on Monday its first half net profit rose 65 percent from a year ago on higher palm oil prices.
It posted a net profit of 682.5 billion rupiah ($75.45 million) in the January-June period, up from 414.7 billion rupiah in the same period last year, the firm said in a statement.

The company sold crude palm oil at an average price of 5,222 rupiah a kilogram, up 55.8 percent from 3,351 rupiah a kilo a year ago.

`Surging demand for vegetable oil from highly-populated nations such as India and China coupled with biofuel demand in developed countries pushed up global crude palm oil prices,` the company said.

`Palm oil prices will keep an upward trend in 2007 as consumption is expected to exceed supply,` the firm added.

Analysts expect the company, controlled by the country's largest automotive distributor PT Astra International Tbk , to book a net profit of 1.4 trillion rupiah this year, up from 787.3 billion in 2006.

The surge in palm oil prices helped compensate for lower sales of crude palm oil this year.

In the first half, Astra Agro sold 398,787 tonnes of crude palm oil, down 16.3 percent from 476,597 tonnes in the same period 2006 due to a decline in the company's palm oil output.

A prolonged dry spell cut the company's crude palm oil output by 12.5 percent in the January-June period to 411,976 tonnes, from 470,718 tonnes in the first half of 2006.

The company plans to build two new palm oil mills each with a capacity to process 45 tonnes of oil palm fruit per hour.

The mills, which are expected to start operating in 2008, will increase the number of mills operated by the company to 21, with total capacity to process 955 tonnes of oil palm fruit an hour.

This year, Astra Agro plans to plant 17,000 hectares of land with oil palm.

Indonesia is about to overtake Malaysia as the world's top crude palm oil producer this year with output from Southeast Asia's largest economy seen at 17.4 million tonnes and exports at 13.2 million tonnes in 2007.

Source: Reuters