Bumitama Agri

Bumitama Agri: No surprises 1Q14 results Net profit doubled to 307b rupiah (or on a core basis 275b rupiah, +69.3% y/y, -18.2% q/q, if excluding unrealized forex gain of 31.9b rupiah). Revenue increased 55.4% to 1.3t rupiah, on increased selling prices and volumes of CPO and palm kernel. CPO and PK volumes grew 10.3% and 9.2% respectively, while ASPs for CPO was 8,786 rupiah (+35.3%) while for PK was 5,591 rupiah (+118.1%). Gross margins held steady at 39%. Maybank KE expects stronger quarterly profits to come, and likes it for long-term value proposition, driven by young tree age of 6 years which will sustain a projected 21% FFB output CAGR between 2013-16, plantable reserves of 60k ha, and low cost of production. Bumitama announced a 1.3¢ interim dividend Maybank KE maintains Buy with TP $1.38