IJMP reported a core profit of RM13.2m against RM13.0m in 1Q18. In spite of higher FFB production in Indonesia operations, both country (Malaysia and Indonesia) recorded a lower yoy PBT mainly due to lower ASP realised for palm products. This was also compounded by higher plantation maintenance costs and overheads in Indonesia operations as increased young mature area, as well as additional depreciation associated with the commencement of the second palm oil mill.
On quarterly basis, although revenue increased 30% to RM183m, IJMP recorded a pre-tax loss of RM26.3m mainly due to lower sales volume of PKO in Malaysia operations, as well as ASP of palm products for both in Malaysia and Indonesia. Higher net unrealised foreign exchange loss of RM30.88m on USD denominated borrowings (4Q18: R10.82m losses) and production costs pressure from the increase in young mature areas in Indonesia also aided to the lower results.
Although we estimate that FFB production to increase significantly in the future due to large area of its young estates in Indonesia attaining maturity and high yielding age bracket, we believe that the earnings upside would be limited by higher cost of production and lower ASP of palm products moving forward. As such, we maintain our FY19 earning forecast with SELL recommendation. Maintain TP of RM1.70, based on FY19 EPS and PER of 22x.
Source: BIMB Securities Research - 29 Aug 2018
Chart | Stock Name | Last | Change | Volume |
---|
Created by kltrader | Aug 12, 2024
Created by kltrader | Aug 12, 2024
Created by kltrader | Aug 09, 2024
Created by kltrader | Aug 09, 2024