First Resources

First Resources: Good set of 3Q12 results which was above estimates, rev at 151.8m, +4.5% yoy and flat qoq, while net profit at $64.3m, +25.3% yoy and +21.3% qoq. For 9M12, net profit +8.3% to US$164m, while for the qtr Ebitda margins improved at 62.5% vs 57.8% yoy. Overall, strong performance was mainly driven by higher sales vol of palm based products. CPO sales vol at 128.7k, +11.7% yoy and palm kernel at 32.2k tons, +15.2% yoy, whose increase was in tandem with increases in production volumes. Refinery and processing sales vol at 59.95k tons, +30.7% yoy, mainly due to the ramping up of operations at the grp’s processing plants and increase in purchases of third party palm oil products. CPO and PK extraction rate however fell slightly, at 23% vs 23.8% and 5.4% vs 5.5% respectively, while total planted area stands at 138.6k ha vs 129.5k ha yoy. Plantation age profile remains young, with weighted average of 8 years. Going forward, grp note that performance so far has been aided by robust growth in production vol from its plantations. Production growth is expected to continue in 4Q, albeit at a slower pace as production has peaked seasonally in 3Q. Despite recent volatility in crude palm oil prices, the Grp remains positive on the long term fundamentals of the palm oil industry.