* Q1 underlying profit, revenue jump on higher CPO prices
* See 2017 total capex budget down 20 percent
* Multi-year low global stocks to help offset rising output
* Says CPO prices sustainable at current levels (Adds comment from call, details)
SINGAPORE, May 15 (Reuters) - Golden Agri-Resources Ltd’s underlying profit in the first quarter jumped 70 percent from a year ago, helped by higher palm oil prices and continued recovery in palm production as the impact of a crop-damaging El Nino faded.
Global demand growth and low inventories will help offset an expected uptick in palm output this year, helping sustain crude palm oil prices at their current levels and underpinning Golden Agri’s performance, the Singapore-listed company said.
“We do expect production to accelerate in the second half. However, at the same time we would like to draw your attention to the global stock levels which are at multi-year lows ... we expect that a lot of the additional production will be absorbed,” a company executive said on an earnings call.
For the quarter ended March, Golden Agri reported an underlying profit, excluding a foreign exchange loss and other items, of $84 million. Including a $1.2 million foreign exchange loss, its net profit more than halved to $38 million.
Golden Agri’s revenue jumped 37 percent to over $2 billion, while earnings before interest, taxes, depreciation and amortization rose 29 percent.
Its palm product output in the first quarter rose 26 percent to 696,000 tonnes. The company said it was targeting to replant 10,000 hectares this year.
It reaffirmed its forecast for a 15-20 percent growth in palm production this year, but also said it was “confident in the robust demand growth for palm oil in the long term”.
Crude palm oil (CPO) prices will remain supported by global demand growth, including the implementation of Indonesia’s biodiesel mandate that would help mop up the top producer’s supplies, the company said.
The company estimated a total capital expenditure budget of $150 million for the year, versus $180 million a year ago.
Earlier in the day, Olam International Ltd reported a 26.6 percent rise in its first-quarter profit. The commodity trader expects CPO prices of between 2,200 ringgit and 2,700 ringgit this year.
Palm prices are currently near 2,680 ringgit ($619.65).
Benchmark Malaysian palm oil futures averaged 2,900 ringgit per tonne over the period, above the year-ago average of 2,588 ringgit. ($1 = 4.3250 ringgit) (Reporting by Himani Sarkar; Editing by Miral Fahmy and Ed Osmond)