- Bumitama Agri Ltd (UNRATED, S$1.035) held a conference
call on its 9MFY12 results yesterday. The group’s annualised results were
slightly below consensus estimates of Rp795bil for FY12F. Bumitama is currently
trading at a FY13F PE of 12.8x according to Bloomberg estimates.
- Bumitama’s revenue grew 22.6% YoY to Rp2.5trillion in
9MFY12 underpinned by a 28% YoY increase in CPO sales volume and forward sales
while net profit climbed 17.5% to Rp558.5bil.
- Average selling price of CPO edged down 1.2% from
Rp7,740/kg (RM2,694/tonne) in 9MFY11 to Rp7,644/kg (RM2,549/tonne) in
9MFY12.
- Bumitama’s FFB production is expected to improve 30% to
35% in FY12F before slowing down to a 25% growth rate in FY13F. The group’s FFB
production was still strong heading towards mid-November.
- Bumitama had also planted about 10,100ha of oil palm in
9MFY12, which is in line with the group’s new planting target of roughly
13,000ha per year.
- We gather that Bumitama has not faced any problems selling
its CPO to the refineries. The group’s storage tanks were only 69% full as at
end-September.
- About 60% to 80% of Bumitama’s CPO production is sold
based on long-term contracts to the refineries. These contracts last between
six to 12 months.
- Production costs were about Rp3,289/kg (RM1,097/tonne) in
9MFY12 compared with Rp3,370/kg (RM1,132/tonne) in 1HFY12. We understand that
wages of workers in Central Kalimantan would increase by 17% in FY13F. Minimum
wage for the West Kalimantan region for FY13F has not been determined yet.
- In spite of this, Bumitama’s production costs per tonne
are envisaged to remain flattish in FY13F on the back of higher palm oil
production and relatively unchanged fertiliser costs.
- On the issue of the revocation of its 4,810ha of land in
Central Kalimantan, Bumitama has proceeded with the court case to put the
revocation on hold.
- The group is optimistic that the land would be returned
back as recently, there was a legal precedent whereby a logging company in a
nearby area had the revocation of its land overturned by the court.
Source: AmeSecurities
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