What Golden Agri-Resources’s own third quarter performance update shows, what its footnotes change, and what it leaves out. No price view.
Golden Agri-Resources reported record nine-month revenue of just over US$10 billion, up 6 percent, but the more useful story sits below the first page. Revenue growth came mainly from higher crude palm oil prices, while downstream sales volume was broadly flat. I read the company’s own Q3 performance update, especially the footnotes behind EBITDA, net profit and net debt. The key issue is that its US$404M net debt figure nets off trade receivables, inventories and supplier advances, not just cash. That can make two companies’ “net debt” figures look alike while measuring very different things.
Key takeaways:
Nine-month revenue rose 6 percent to just over US$10 billion, driven mainly by price.
Downstream sales volume was about 8.7 million tonnes, down 0.6 percent.
Gross profit rose 24 percent, while EBITDA rose 10 percent to US$970 million.
Interest-bearing debt was US$3,563 million, against cash and short-term investments of US$1,134 million.
The company’s US$404M net debt definition includes liquid working capital, not cash alone.
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