First Resources - RHB Invest 2024-02-29: Decent Ending To The Year

• First Resources’ FY23 results were in line with our and Street expectations. Going forward, while productivity should improve and costs reduce, downstream margins could remain under pressure in 2024.
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55% q-o-q decline in net profit in 4Q23

• First Resources (SGX:EB5) recorded a 55% q-o-q decline in net profit in 4Q23, resulting in a 49% y-o-y drop in FY23 earnings to US$165.1m. This came in largely in line with our and Street’s forecasts at 102% and 98% of FY23 estimates.
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Briefing highlights:

4Q23 nucleus FFB production dropped by 8% q-o-q

• 4Q23 nucleus FFB production dropped by 8% q-o-q (+15.7% y-o-y), bringing FY23 FFB to 0.5% y-o-y – in line with management’s flattish growth guidance for last year.
• First Resources is expecting up to a 5% output growth for 2024, as weather conditions have somewhat regularised since Feb 2024. It is expecting output trends to normalise in 2024, with 1H:2H output at 43%:57%.
• We adjust up our FFB growth assumptions to 2-4% for FY24-25 from 0-2%;

Small inventory build-up in FY23.

• Read more at SGinvestors.io.

Singapore Research RHB Securities Research | https://www.rhbgroup.com/ 2024-02-29 SGinvestors.io

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