Bumitama Agri - OCBC Investment 2024-05-14: Where Flowers Bloom, So Does Hope

• Bumitama Agri (SGX:P8Z)’s 1Q24 revenue rose 7.7% y-o-y to IDR3.9t. Both CPO and PK performed well.

A decent start to the year on higher sales volumes

• CPO revenue grew 7% y-o-y to IDR3.3t, as a 7% y-o-y increase in sales volume more than offset a 1% decline in average selling price (ASP) to IDR11,600 per kg. Meanwhile, PK revenue grew 19% y-o-y to IDR333b, supported by a 17.7% y-o-y jump in sales volume and 1% y-o-y rise in ASP to IDR5,630 per kg.
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• Bumitama Agri's net profit, however, fell 23.5% y-o-y to IDR328b, largely due to FX headwinds from a stronger US$. Excluding the FX loss in 1Q24 versus an FX gain in 1Q23, Bumitama Agri's core earnings would have grown 22.8% y-o-y to reach IDR374b.

Productivity improved on a y-o-y basis

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• Bumitama Agri processed 1.15m tons of fresh fruit bunches (FFB) in 1Q24, representing an 8% increase y-o-y. This was led by external contributions, which spiked 20% y-o-y (-17% q-o-q) to 387k tonnes, while internal FFB volume increased by a smaller 2% y-o-y (- 18% q-o-q) to 764k tonnes.
• FFB yield nudged upwards by 2.4% y-o-y (-19.2% q-o-q) to 4.2 tonnes per ha in 1Q24. CPO and PK production volumes were up 9.2% and 12.1% y-o-y (down 20.1% and 21.7% q-o-q) to 256k and 53.5k tonnes, respectively. Oil extraction rates fell 0.4 ppt q-o-q but rose 0.4 ppt y-o-y to 22.5%.

Maintain fair value estimate of S$0.785

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Ada Lim OCBC Investment Research | https://www.iocbc.com/ 2024-05-14 SGinvestors.io

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