Bumitama Agri

Bumitama Agri: releasing results on 28 Feb before market opens. UOBKH expects 2013 results to be within expectations, with net profit about Rp729b (-2.1% y/y) mainly due to lower CPO ASP (9M13: Rp6,803/kg, vs 2012: Rp7,193/kg) Bumitama Agri reported a 16.5% y/y growth in nucleus FFB production for 2013, one of the highest in the industry in 2013 when most plantation companies only reported low single-digit growth, due to Bumitama’s profile and the addition of 10% of new mature areas in 2013. The Indonesian FFB production for 2013 was lower and caught market by surprise; this was due to the lagged impact from dry weather back in 2011 and delay in fruit formation. UOBKH expects that going into 2014, we expect better performance from Bumitama, riding on FFB yield recovery, the addition of 13-18% new mature areas and recovery in CPO price. Being a pure upstream player, BAL’s bottom-line is very sensitive to changes in CPO prices. For every 10% increase in CPO price, BAL’s 2014 net profit will rise by 13%. UOBKH maintains a Buy with TP of $1.40