NEW Britain Palm Oil reported lower revenues and profits in its third quarter trading update today.
The firm, which provides palm oil from sustainable sources and operates a dockside refining plant and bakery fats site on Regent Road, said sales in the nine months ended September 30 were approximately £349.6m after conversion from US dollars, compared with £393.2m the previous year.
Pre-tax profits came in at £50.4m against £138.8m last year.
The group explained in its half year statement in August that production had been badly affected by heavy rainfall across its harvesting sites in Papua New Guinea earlier in the year.
But its fortunes have also been hit by a fall in prices for crude palm oil and palm kernel oil due to high production and supply levels in Malaysia and Indonesia.
Its crude palm oil production was 7.9% lower in the nine month period, while palm kernel oil production was 10.6% below last year’s levels.
The statement today 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 prices.”
It said progress has been made in identifying cost savings going into 2013, and although palm oil prices remain depressed due to excess stocks in Malaysia, there are signs that these may have peaked and that lower production from Malaysia and Indonesia following their seasonal trough and higher exports may “substantially” lower stocks in the coming months.
“A strengthening of palm oil prices in the first half of 2013 could occur if stocks do draw down,” the company said.