- First Resources's 9M24 results beat our and street expectations. We believe 4Q24 earnings will be better q-o-q despite output having peaked in Q3 but the lower output should be compensated by higher CPO ASP, and better downstream earnings.
3Q24 FFB output was resilient (relative to peers)
- - Read this at SGinvestors.io -
- 3Q24’s better results were driven by higher revenue (+2% y-o-y, +3% q-o-q) on better FFB nucleus output (+3% y-o-y, +25% q-o-q), and improved processing margins. Had it not been for a net inventory build-up of 45,000t in 3Q24 (2Q24: a net drawdown of 16,000t), earnings would have even better.
- - Read this at SGinvestors.io -
Refining margins improving q-o-q
- As for its downstream division, we understand 3Q’s refining margins has improved q-o-q. Meanwhile 4Q24’s refining margin is looking even more positive q-o-q due to rising prices.
- On its hedging position, First Resources has largely sold on spot in 2024. It is still evaluating 2025’s market condition and overall speaking, remains not too committed for now.
FY24E-26E EPS forecasts raised by 18%-25%
- Read more at SGinvestors.io.
