- First Resources's FY24 core PATMI beat ours / street estimates. Despite our forecast for EPS retracement in FY25E (-6% y-o-y), valuation looks attractive trading at single-digit P/E with above 6% dividend yield.
- - Read this at SGinvestors.io -
- On a worst case scenario where its membership is suspended, we believe the financial impact is likely to be minimal as First Resources generates little price premium from its RSPO-certified oils.
Both upstream and downstream performed better
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- Higher y-o-y 2H24 profits were due to better upstream and downstream contributions. Had it not been a net inventory build-up of 78,000t (i.e. lower sales due to deferred delivery), earnings would have been even better.
- 2H24 plantation EBITDA rose to US$243m (+41% y-o-y) due to better CPO (+13% y-o-y) and PK ASPs (+73% y-o-y), and better FFB output (+6% y-o-y).
- First Resources has achieved its fertiliser plan in FY24. As for downstream, First Resources returned to the black with an EBITDA of –US$10m in 2H24 on 2.0% margin (+6.9-ppts y-o-y).
Guiding for 5% y-o-y nucleus FFB growth in FY25E.
- Read more at SGinvestors.io.
