SOP’s FY12 earnings of RM158.5m (-34.8% y-o-y) was marginally within our forecast but missed consensus’ amid weaker CPO prices (-18% y-o-y), against the backdrop of a challenging operating environment for Malaysian refiners in 9MFY12 and weak production in 1HFY12. FFB output, nonetheless, increased by 5.2% in 2012. Our expectations are for production to increase by 15.5% and 14.5% in FY13 and FY14 respectively. Our forecasts are unchanged and we reiterate BUY with FV of RM6.77.
Within expectations. SOP registered 4QFY12 revenue of RM376.6m (+19.8% y-o-y, -10.5% q-o-q) and earnings of RM24.3m (-42.2% y-o-y, -40.2% q-o-q) as its 20.0% y-o-y FFB production growth was unable to offset the steep 31.7% y-o-y decline in realized CPO prices. Revenue and net profit for FY12 clocked in at RM1,307.7m (+12.1% y-o-y) and RM158.5m (-34.8% y-o-y), against a backdrop of a challenging refining environment, a 18.2% y-o-y drop in realized CPO prices and weak output in 1HFY12. Refining margins in East Malaysia significantly improved in 4QFY12 following a dismal 9MFY12 dotted with
instances of negative margins. Some industry players suggested that refining margins were as wide as RM100 per tonne during the quarter, if some forward sales were also in place. FY12’s earnings were marginally within our expectations but missed consensus’, representing 95.2% and 87.1% of our and consensus estimates.
instances of negative margins. Some industry players suggested that refining margins were as wide as RM100 per tonne during the quarter, if some forward sales were also in place. FY12’s earnings were marginally within our expectations but missed consensus’, representing 95.2% and 87.1% of our and consensus estimates.
Source: OSK
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