“The results have been materially impacted by heavy localised rainfall during the period,” said Carroll. “This was particularly in West New Britain where precipitation was 60% higher than the same period in the prior year and over half the total rainfall recorded in 2011.
“Weather patterns have since returned to more normalised levels but whilst some fruit was harvested during the period, much of it was lost.”
As a result, Carroll predicted full year pre-tax profit for NBPO would fall by 18.1% from $250.8m (€196.2) to $205.4m (€160.7m). Full year revenue would also fall by 5.1% from $747.7m (€585m) to $709.4m (€555m).
Hit by the weather
A spokesman for NBPO said: “The company was hit by the weather. Papua New Guinea saw 60% of its annual rainfall in the first three months [of 2012].”
However, he continued: “It’s all back to normal now and we will hit full year numbers.” He said 85-95% of the drop in profit for the first quarter of 2012 had been “entirely down to the rain”. In addition, the currency of Papua New Guinea, the kina, had depreciated against the dollar and that had impacted input costs.
Yields for the company fell for crude palm oil and palm kernel oil, with the latter also dropping 26.6% in price. Revenue for the three months to March 31, 2012, fell by more than a quarter, while pre-tax profit more than halved for the company. Rain also hampered logistics in the region, impacting the extraction rate at the mill, said Carroll.
Supply tight, strong demand
Despite this, prospects remained positive in the medium term, with supplies remaining tight as emerging markets continued to drive strong demand and its health benefits generated growth in developed markets, he said.
The bad weather had been localised to West New Britain, with NBPO’s other operations at Kula; Ramu and the Solomon Islands not impacted to the same extent and yields up 4%, he added. Consequently, Carroll attributed the extremely shaky start to 2012 to “an unavoidable blip that is not management related”.
NBPO also announced that the UK bakery; margarines and fats plant in Liverpool is now operational with sales of packed products to the UK bakery and foodservice sectors underway since February 2012. Investment at the site to double capacity with the addition of a new deodoriser is also underway.