First Resources

First Resources: Just released their production figures for July this morning. FFB harvested was up 0.6% y/y to 221,689 tons, but the group also saw a significant rise in FFB purchased at 27,106 tons, +222%. This could probably result in higher cost of sales if the pattern continues. The last qtrly results, First Resources bottom-line was also dragged substantially by a higher cogs. On the production front, management expects production to improve in 2H13 due to seasonality, and guides that production growth over the forthcoming years will be enhanced by yield improvements in newly acquired assets as a result of its rehabilitation programs. Recent weakness in the Indonesian rupiah relative to the USD is also expected to benefit the group as its revenue is mainly denominated in USD while a substantial portion of its cost is denominated in rupiah.