-->

Bumitama Agri - Maybank Research 2022-08-16: Post 1H22 Results Briefing

BUMITAMA AGRI LTD. (SGX:P8Z) | SGinvestors.io BUMITAMA AGRI LTD. (SGX:P8Z)

Bumitama Agri - Post 1H22 Results Briefing

  • Bumitama Agri (SGX:P8Z) hosted a post results briefing. Key takeaways:
    1. Better-than-expected CPO ASP was key to its outperformance in 2Q22 whereby 2Q’s CPO ASP achieved of IDR14,923/kg (+74% y-o-y, +10% q-o-q) was above market price. This was in part due to the long term contract arrangements with committed volumes (but not prices) which led to a 1-2 months’ lag price recognition;
    2. Following its strong FFB nucleus output growth in 1H22 (+9% y-o-y to 1.365mt), Bumitama Agri has revised up its growth guidance to +16-18% y-o-y (from +5-10% y-o-y) as it expects 2H output to be at least similar to 1H. Still, Bumitama Agri highlighted that it will only gain a clearer picture in Sept once the census figure from field survey is out;
    3. Group output will likely peak in 4Q after softening in 3Q;
    4. Inventory as at end-June is ~70% of available tank capacity, or about 2 months’ supply. Bumitama Agri expects a normalisation of inventory by end-Sept; and
    5. ~50% of its full-year fertiliser plan has been applied in 1H22 (1H21: ~45%).



Cost guidance unchanged at +20%-25% y-o-y for FY22E

  • Bumitama Agri guides that its 1H22 nucleus cost of production was Rp5,200/kg (+14% y-o-y), much higher than our earlier estimates. The difference suggests that BAL benefited immensely from its constant purchase of 3rd party FFBs (even during the ban) and made better processing-cum-inventory gains in 2Q.
  • For FY22E, Bumitama Agri maintains its unit cost of production guidance to be higher by 20-25% y-o-y, following fertiliser price hike (FY21: IDR4,564/kg).

BUY for Bumitama Agri's single-digit P/E & high dividend yields






Ong Chee Ting CA Maybank Research | https://www.maybank-ke.com.sg/ 2022-08-18
SGX Stock Analyst Report BUY MAINTAIN BUY 0.880 SAME 0.880



Advertisement



MOST TALKED ABOUT STOCKS / REITS OF THE WEEK



loading.......



ANALYSTS SAY


loading.......