For its half year ended June, the palm oil producer reported patmi of IDR1.3b, up 48% y-o-y. Revenue in the same period was up 28% y-o-y to IDR9.7t, thanks to a 22% increase in average selling prices to IDR14,500 per kg, which more than offset a 1% dip in sales volume.
In addition, the company was able to maintain cost discipline, achieving a 2.6 percentage point (ppt) expansion in EBITDA margin.
To reward shareholders, Bumitama Agri plans to pay an interim dividend of 3.63 cents per share, which is more than triple of that declared for 1HFY2024. This represents an annualised yield of 4.3% based on the last close price of 84 cents as at Aug 11.
Going into 2HFY2025, Bumitama Agri expects production to continue improving while palm oil prices trade sideways.
See also: OCBC's Lim cuts fair value for SingPost to 49.5 cents
"Despite a rebound in benchmark prices in July, CPO prices continue to remain competitive vis-à-vis soybean oil prices, which have rallied on optimism over US biofuel demand.
"This has driven surges in imports from China and India in June," says Lim.
Meanwhile, domestic demand in Indonesia remains robust, supported by the B40 biodiesel mandate and affirmation of plans to move towards B50 in 2026.
See also: CGSI's Ong raises target price for BRC Asia to $4.30 on healthy industry fundamentals
After assuming "firmer" average selling prices for the rest of the year, plus updated forex estimates given the recent volatility of the Indonesian rupiah, Lim has derived her higher fair value of $1.05.
Bumitama Agri shares changed hands at 92 cents as at 4.43 pm, up 9.52% for the day.
