First Res: 1Q16 results disappoint, marred by lower CPO ASPs and output
-1Q16 net profit of US$5.3m (-77.9%) was only 4% of full year street estimates.
- Revenue of US$113.1m (+17.5%) was boosted by improved volumes (CPO +3%, palm kernel +3.5%), offset by lower average selling prices (ASP).
-GPM fell 24.5ppt to 30.8% on weaker ASPs and increased purchases of third-party palm products
- Currently trading at 22x trailing P/E and 12.7x forward P/E. However, the latter is subject to the likelihood of broker downgrades post this set of disappointing results.
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