Olam

Olam: BofA-ML maintains Underperform with TP$1.00. Cites performances in past two quarters have proved Olam’s growth consistency is not bullet proof, coupled by high gearing and lag profit hit from cotton defaults. 9M12 core profit of S$209mn was only 52% of consensus expectations excluding Gabon Special Economic Zone earnings. Furthermore, profits have been boosted by goodwill and bio asset gains. Houses estimates are 30-50% below consensus with possible deviation from strong margins recovery. Prefers Noble for more visible profit profile.