Indofood Agri

Indofood Agri: Net profit appears to have missed consensus estimates. 1Q Rev at Rp3.2t +9.3% yoy +0.4% qoq with net profit at Rp376.9b -26.7% yoy -17.2% qoq. Gross margins dipped slightly at 34.7% compared to 35.6% prev quarter and FY12 margin of 36.5%. Both divisions, Plantation and Edible Oil & Fats contributed to the rev increase through higher sales. Despite the rev increase, co recorded lower net profit due to lower ASPs of both palm products and rubber. Higher costs of production and a 26% increase in plasma purchases, which typically yields lower margins. Co were of the view that avg CPO prices stayed firm at US$1107 per ton compared to US$1251 per ton in 1Q11 and rubber prices at US$3881 compared to US$5732 in 1Q11. IFAR now trades at 10.1x fwd P/E. Peer Golden Agri is trading at approx at 11.4x fwd P/E.