Revenue for the quarter increased 37.2% to IDR2.05 trillion from IDR1.49 trillion a year ago, due to improved palm oil and palm kernel production as well as higher average selling price.
In 9M17, the group recorded strong fresh fruit branches (FFB) output growth of 40.9% y-o-y on the back of some 7,464ha of land that came into maturity during the period.
In a Wednesday report, RHB says that the output growth came in much higher than the management’s guidance of 25% growth and RHB’s forecasted 27% increase.
The group is maintaining its FY17 FFB growth forecast of 25% y-o-y, implying that 4Q17 would see output increase by 9% q-o-q.
However, management cautioned that the peak period may be slightly delayed to closer to end- 4Q17/early-1Q18.
The group’s unit cost in 9M17 was up 8.4% y-o-y to IDR4,526/kg. It applied 93% of its fertiliser application in 9M17.
As for FY17, the group’s management is keeping its overall expectation of a 5% rise in unit costs y-o-y, which implies that costs may decline q-o-q in 4Q17.
However, the group received a biodiesel allocation of 13,900 kilolitres for the Nov 2017 to Apr 2018 period, 9.4% lower than the previous period from May to Oct 2017.
Hence, given the new pricing structure and higher feedstock prices, margins have reversed into the red from less than 2% previously.
Consequently, RHB is cutting its margin assumption for this division.
As at 10.35am, shares in Bumitama Agri are trading at 83 cents or 1.84 times FY17 book with a dividend yield of 2.3%.
