Why First Resources is geared for a comeback

60% of its production is expected to come in 2H16.

After it produced low yields as it battled the onslaught of El Niño in the first half of the year, First Resources Ltd. is poised for a comeback in 2H16 with a huge chunk of production coming its way.

According to a report by UOB Kay Hian, First Resources is expected to deliver at least 70% of its full-year earnings in the second half of the year.

"We view that this is highly possible given 60% of its 2016 production is expected to come in 2H16," the report stated.

More so, UOB forecast a higher average selling price of about US$600-620/tonne in 2H16 vs 1H16’s US$548/tonne.

Also, lower costs in the said period is said to come, since bulk of manufacturing costs, which is 35-45% of the total cost of production, were already booked in the previous months.

UOB Kay Hian also noted that First Resources could look forward for a better results that will be mainly driven by higher production and better realised palm product prices.

To recall, First Resources profit tumbled 36.2% to $42.4 million in the first half of the year.