First Resources - Maybank Research 2024-03-01: FY23 Results below Expectations; Downgrade To HOLD

• First Resources (SGX:EB5)'s FY23 core PATMI missed ours / street estimates on higher-than-expected unit cost, unexpected downstream losses in 2H, US$13m in assets write-down (converting rubber estates to oil palm) and US$7m in FX loss.
• - Read this at SGinvestors.io -

2H23: Hurt by downstream losses & write-down

• 2H23 core PATMI of US$79m (-60% y-o-y) brings First Resources's FY23 core PATMI to US$146m (-56% y-o-y) which met just 76%/86% of our/street full-year estimates.
• Lower y-o-y 2H23 profits were due to larger downstream losses, assets write-down, lower CPO ASP (-11% y-o-y) and net inventory build-up of 14,000t (i.e. lower sales), mitigated by higher FFB nucleus output (+5% y-o-y).
• - Read this at SGinvestors.io -
• First Resources completed ~90% of its FY23 fertiliser plan, a step-up from just 1/3 completed in 1H.
• As for downstream, First Resources posted a LBITDA of –US$17m in 2H23 (+571% y-o-y) on -4.8% margin (-4.4-ppts y-o-y) on challenging market environment.

FY24E: FFB output to grow by up to 5% y-o-y

• Read more at SGinvestors.io.

Ong Chee Ting CA Maybank Research | https://www.maybank-ke.com.sg/ 2024-03-01 SGinvestors.io

---