[SINGAPORE] Golden Agri-Resources expects “short-term pain” from Indonesia’s sweeping land-use review, but sees the land crackdown as a necessary step that resolves “a legacy issue” of overlapping land tenures and provides businesses with long-term clarity.
During a results briefing on Friday (Aug 15), the vertically integrated palm oil plantation company acknowledged that the ongoing discussions with the Indonesian authorities could lead to adjustments in its land bank.
Anita Neville, the company’s chief sustainability and communications officer, said: “Addressing this legacy issue of overlapping land tenure gives businesses long-term confidence. Of course, getting there requires some of this short-term pain as we go through the review process to determine which bits are in and which bits are out.”
Even as uncertainty lingers over potential land losses, she noted that the government’s move should “provide clarity on where plantation companies and other land-use managers can operate”.
“We see this as a good thing… a positive development for Indonesia in the future,” she added.
Given the active engagement with the regulators, Golden Agri-Resources is “not in a position” to give an indication of the material impact on the company, Neville said.
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As the government expects to complete the process by end-2025, the company could provide an update by year-end, she added.
Its head of investor relations Richard Fung cited the upstream segment – the plantations and palm oil mills – as the largest contributor to the company’s first-half earnings, which grew 56.5 per cent on the year. “This was driven by more favourable weather conditions, which gave us more production – more than compensating for the replanting process.”
He noted that replanting activity during the first half covered 6,000 hectares (ha). The segment’s earnings before interest, taxes, depreciation and amortisation were up 51 per cent at US$320 million, and its revenue grew 30 per cent to US$1.2 billion.
Since early 2025, Jakarta has confiscated more than 2 million ha of allegedly illegal forest concessions.
In early July, a government taskforce announced that it had transferred nearly 400,000 ha of seized oil palm plantations – previously controlled by 232 companies – to Agrinas Palma Nusantara, a state-owned company formed in January by Indonesian President Prabowo Subianto’s administration.
Neville noted that the movement has been a “long time coming”, with implications not just for the palm oil industry, but any industry involved in the management of natural resources.
Golden Agri-Resources did not disclose potential exposures, but emphasised its active cooperation in the process.
Shares of Golden Agri-Resources were trading up 1.9 per cent or S$0.005 at S$0.27 as at 11.43 am on Friday.
