CEO’S MESSAGE DEAR SHAREHOLDERS, 2024 was a strong year for IndoAgri. Palm oil prices rebounded significantly after a stable 2023, trading at their largest premium over soybean oil in 40 years. Traditionally the most affordable vegetable oil due to high yields per hectare and low production costs, palm oil defied expectations by sustaining its price advantage over soybean oil throughout the year. This development reflects a structural change in the edible oils market, driven primarily by the progressive redirection of Indonesia’s palm oil exports into domestic biodiesel production. In 2024, approximately 11.7 million tonnes of palm oil were channelled into the country’s B35 biodiesel mandate, with plans to increase this to 13.6 million tonnes under B40 by 2025 and B50 by 2026. This shift, coupled with lower yields from adverse weather and tightened supply, pushed domestic CPO prices (KPB) upwards by 17% to an average of Rp13,190 per kg, with international CPO prices (CIF Rotterdam) increasing 15% to an average of USD1,113 per tonne in 2024. Meanwhile, global sugar prices fluctuated between 18 and 25 US cents per pound, influenced by Brazil’s unpredictable crop performance due to severe drought and fires in key sugarcane regions. Such weather extremes have become increasingly common, underscoring the importance of sustainable farming and climate-resilient strategies to safeguard global food supplies. As a vertically integrated agribusiness group, IndoAgri capitalised on its competitive strengths during the year. Full year net profit after tax came in significantly higher at Rp2,110 billion in 2024 compared to Rp936 billion in 2023. The improved profitability was mainly due to higher profit from the Plantation Division. The Plantation Division faced heavy rainfall in Indonesia, which impacted harvests and operations across estates, as well as challenges from aging trees. Our FFB nucleus production declined by 1% year-on-year, while CPO production remained flat. Despite these hurdles, the Division recorded higher profit mainly due to higher selling prices of palm products and lower nucleus palm production costs, tighter cost controls and higher net gains arising from changes in fair value of biological assets. This was partly offset by an increase in other operating expenses. Over in Brazil, CMAA crushed 9.3 million tonnes of sugar cane. Our share of the joint ventures’ profit was lower at Rp44 billion, mainly due to higher financial expenses and a one-off lease write-off. To ensure business continuity in our palm plantations during rainy seasons, we continue to invest in improved infrastructure. Critical areas have now been reinforced with concrete to prevent waterlogging and improve accessibility during adverse weather. In flood-prone areas, we have started testing innovative materials such as artificial rubber. These measures, along with improved drainage systems to manage water flow in floodplains, are crucial for long-term resilience. Downstream, the EOF Division also demonstrated resilience, maintaining profitability by increasing the sales volumes of cooking oils and margarines to meet domestic demand. To support future growth, we are expanding the Tanjung Priok Group Overview Financials Other information Sustainability and Governance Operation and Financial Review 08 Indofood Agri Resources Ltd.
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