Muted earnings growth for Bumitama Agri seen in Q2 due to export ban

The export restrictions will result in lower sales volume.

As the Indonesian government enforced an export ban, SGX-listed Bumitama Agri could expect muted earnings growth in the second quarter (Q2) of 2022, investment banking firm, UOB KayHian, said.

Currently, the export ban’s impact has not been reflected yet because it was announced before the Lebaran holiday, where fewer workers are available.

But UOB KayHian said the export ban will likely lead to lower sales volume amidst expected higher production.

The UOB KayHian also highlighted that there are not many willing sellers in the market given the gap between bids in Indonesia’s domestic crude palm oil pricing widened after the export ban declaration.

As for its storage capacity, the Indonesian oil palm plantation firm is still good for one month of production. Its inventory in the end of March 2022 was slightly higher compared with the end of December 2021 but still relatively low compared with normal levels.