• Overview. THP’s recorded a LATAMI of RM167.6m in 4Q19 against RM578.2m in 4Q18 mainly due to impairments for plantation assets and finance cost amounting to RM133m and RM14.0m respectively. On quarterly basis, higher LATAMI were due to 1) lower FV change in biological asset, 2) higher other expenses amounting to RM76m on higher impairment recognised on assets classified as held for sale, and 3) higher changes in negative FV of forestry recognised amounting to RM43.2m.
   
• Against estimates: below. FY19 LATAMI was below our estimates as lower average selling price realized of palm products dragged the revenue lower.

• Our call. We have Non-Rated recommendation on the stock. Maintain earnings forecast on the likelihood that its rationalisation exercise would be fruitful and translate to better financial position.

Source: BIMB Securities Research - 26 Feb 2020