First Resources’ 8-Cent Interim Dividend: Stronger Cash Flow, With a Liquidity Caveat

First Resources (SGX: EB5) declared an 8.00 Singapore cent interim dividend for the half year ended 30 June 2026, up from 4.50 cents a year earlier. For dividend investors, the question is whether the larger payout rests on cash generated by the business. The dividend was announced on 14 August alongside half-year financial statements that had not been audited or reviewed. [S2, p. 33] [S2, p. 29]

The cash-flow improvement is encouraging, with qualifications. Reported profit benefited from a valuation gain, and a substantial portion of the group’s bank balances was restricted at 30 June. [S2, p. 3] [S2, p. 21]

What lifted the payout?

Sales rose to US$973.6 million from US$673.9 million in 1H2025. Profit attributable to owners climbed to US$234.9 million from US$149.2 million. Management attributes the stronger performance mainly to higher production volumes and improved processing margins. The acquired PT Austindo Nusantara Jaya Tbk. contributed for all six months this year, compared with only two months in the prior-year half. The year-on-year figures therefore do not measure growth in the older business alone. [S2, p. 3] [S2, p. 30]

Crude palm oil production increased to 656,605 tonnes from 554,519 tonnes. The presentation says sales volumes also benefited from third-party purchases and a 39,000-tonne net inventory drawdown; inventories had built up by 75,000 tonnes in 1H2025. Those differences matter when judging how much of this half’s sales growth could repeat. [S5, p. 1] [S3, p. 7]

Reported profit includes a US$24.0 million gain from revaluing biological assets, versus a US$3.6 million loss a year earlier. The company’s underlying profit attributable to owners removes the after-tax effect of that revaluation; it rose to US$216.2 million from US$152.0 million. That still leaves a US$18.4 million foreign-exchange gain in this half’s earnings, so the company-defined measure is no guarantee of recurring profit. [S2, p. 3] [S2, p. 30] [S2, p. 31]

Did earnings turn into cash?

Net cash generated from operating activities reached US$210.7 million, compared with US$13.8 million a year earlier. Cash flow before working-capital movements also improved, to US$367.1 million from US$263.7 million. Receivables and inventory had absorbed cash in the unusually weak 1H2025 comparison. Operating cash flow in these statements is measured after financial expenses and tax paid. [S2, p. 10] [S2, p. 32]

The group spent US$41.6 million on bearer plants and US$68.4 million on property, plant and equipment in 1H2026. Operating cash flow plus those two signed cash outflows was about US$100.7 million. This rough measure excludes other investing flows and is not cash available at the Singapore parent. The US$124.6 million of ordinary-share dividends paid during the half related to the 2025 final dividend, not the newly declared interim payout. [S2, p. 10] [S2, p. 19]

The balance-sheet qualification

At 30 June, First Resources reported US$229.2 million of cash and bank balances. Of that, US$125.0 million was restricted, leaving US$104.2 million in cash and cash equivalents. The company says US$115.4 million of the restricted balance arose from a change to Indonesia’s export-proceeds rules effective in June. The headline bank-balance figure therefore includes cash that was not freely remissible for the group’s use at that date. [S2, p. 21]

Borrowings fell to US$887.4 million from US$954.4 million at December 2025, and the group had US$112.4 million of undrawn committed credit facilities at June’s end. Higher interest on acquisition-related loans nevertheless lifted net financial expenses to US$18.3 million from US$7.9 million. [S2, p. 22] [S2, p. 31]

What to watch next

The larger interim dividend had support from improved operating cash generation after plantation and equipment spending. Its durability is less certain: the comparison includes a full half from the acquired business, reported profit includes a non-cash revaluation gain, and restricted balances reduced cash freely remissible at period-end. The next results should show whether operating cash flow stays strong and whether restricted cash and financing costs ease. [S2, p. 10] [S2, p. 21] [S2, p. 30] [S2, p. 31]