Period 2Q13 and 6M13
Actual vs. Expectations IJMP’s 6M13 core net profit of RM69m* came in below
both consensus and our estimates. It made up 45% of the consensus’ FY13
forecast of RM153m and 41% of our forecast of RM167m.
6M13 FFB production was below expectation as the FFB volume
of 285,996 mt made up only 43% of our FY13E estimate of 668,073 mt. This could
be possibly due to the trees’ slower
than expected recovery from stress in the Sabah estates. Note that IJMP’s oil
palm trees in Sabah are generally mature with an estimated age of ~14 years
old. That said, the overall group’s age profile is still healthy at ~8.5 years
old.
Dividends No dividend was announced as expected.
Key Results Highlights
YoY, the 6M13 core net profit declined by
28% to RM69m as the FFB volume tumbled 23% to 285,996 mt and the average CPO
price flat at RM3,024/mt (-1%). Cost of production is estimated to have
increased by 10% due to higher wage and fertiliser costs.
QoQ, the 2Q13 core net profit jumped 48% to RM41m as
the impact of
the FFB volume
jump (+48% to 170,766 mt) outpaced that of lower CPO prices (-9% to
RM2,903/mt).
Outlook FY13E
core net profit
is poised to
decline more than 20% YoY due to
the expected lower CPO price of RM2850/mt (-7% YoY), lower FFB production of
645,176 mt (-4% YoY) and possibly higher cost of production by at least 10%.
Change to Forecasts Slash FY13E-FY14E core net profits by 19%-12% to
RM135m-RM157m after assuming lower avg. CPO price of RM2850/mt (from RM3000/mt)
for both years. FY13E-FY14E FFB yield has been lowered by 3%-1% to
20.5mt/ha-18.2mt/ha.
Rating Downgrade to UNDERPERFORM
Expected consensus earnings downgrade and possibility of
another disappointment in 3Q13 result should pressure share price. So far, avg.
CPO price has been weak so far at RM2266/mt (-21% lower
QoQ).
Valuation Cut our TP to RM2.70 (from RM3.35 previously)
based on an unchanged Fwd. PER of 16.0x to the lower FY13E EPS of 16.8 sen
(from 20.9 sen).
Risks Better than expected CPO prices.
Source: Kenanga
No comments:
Post a Comment