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First Resources - Maybank Research 2022-05-16: A Decent Start To The Year

FIRST RESOURCES LIMITED (SGX:EB5) | SGinvestors.io FIRST RESOURCES LIMITED (SGX:EB5)

First Resources - A Decent Start To The Year


Export ban may hurt revenue in 2Q22

  • First Resources (SGX:EB5)'s 1Q22 PATMI broadly met our / consensus expectations.
  • First Resources’s 2Q22 results may be impacted by the recent export ban as we estimate 50-60% of its monthly sales volume is affected by the export ban; potentially only playing catch-up in 2H22. As for forward sales commitment, we understand it is now within normal percentage range done in the past.



A decent start despite export restrictions

  • First Resources provided an executive summary of key financial and operational information on its 1Q22 performance. Its 1Q22 headline PATMI of US$74m (+736% y-o-y, -3% q-o-q) met 32%/31% of our/consensus full year estimates.
  • Stronger y-o-y earnings were boosted by higher revenue of US$304m (+54% y-o-y, -1%) and the absence of forward sales commitments with punitive tax implications suffered a year ago. Overall sales volumes were impacted by export quota imposed by the Indonesian government (for the month of Feb and first half of March) that led to a net inventory build-up of 31,000t in 1Q22 (1Q21: net drawdown of 4,000t).
  • In 1Q22, fertiliser applied was behind schedule at < 25% of full-year’s requirements.


A slow start to 1Q22 nucleus output

  • In terms of production, First Resources's 1Q22 FFB nucleus output of 645,383t (-8% y-o-y, -11% q-o-q) met just 21% of our full-year forecast (Fig.2).
  • First Resources is keeping its 0-5% y-o-y FFB growth forecast for FY21E (MIBG: +3% y-o-y) as it is expecting a normalisation of industry output with 1H:2H ratio at 45:55 (2021: 50:50).

Procured 60-70% of full-year fertilizer requirements






Ong Chee Ting CA Maybank Research | https://www.maybank-ke.com.sg/ 2022-05-16
SGX Stock Analyst Report SELL MAINTAIN SELL 1.940 SAME 1.940



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