Bumitama Agri’s profit surged 69% in Q3

Thanks to higher output and selling prices.

Bumitama Agri recorded a 69% surge in its profit after tax for Q3, reporting a profit of $30.2m (IDR285.4b) for the past quarter.

According to Maybank Kim Eng, Bumitama Agri’s bottom line was boosted by an exceptiona 34% year-on-year growth in its nucleus output, as well as higher average CPO selling prices.

“We continue to like its young trees of six years on average, which should sustain an FFB output CAGR of 21% over 2013-16. We also like BAL’s plantable reserves of c.38k ha and low costs of production. What’s more, as new planting slows in accordance with RSPO stringency, BAL could rewards investors with higher dividends in the near term,” noted Maybank Kim Eng.

Here’s more from Maybank Kim Eng:
Excluding IDR9b of unrealised forex-translation losses, 3Q14 core PATMI was IDR292b (+47% YoY, -22% QoQ). This brought 9M14 core PATMI to IDR942b (+80% YoY), forming 80% of our FY14E forecast and 78% of the market’s.

However, cropping patterns could differ somewhat this year, in part due to a rain deficit in Central Kalimantan in Sep/Oct 2014. This may delay some FFB ripening into 1Q15. 2014 new-planting target has also been lowered to 3-4k ha from 3-5k ha, as it only managed to plant ~1.9k ha in 9M14.