Bumitama

Bumitama: (S$0.69) 2Q16 results and output affected by lagged El Nino effects
- 2Q16 results disappointed as net profit slumped 39% to Rp107.6b.
- 1H16 earnings of Rp303b (-14%) met just 28% of full year street forecast.
- 2Q16 revenue fell 12.9% on lower volumes for both CPO (-23.6%) and palm kernel (-20%)
- FFB output declined 24.6% as FFB yield slumped 40.5% due to lagged impact from 2015's El Nino weather pattern.
- As a gauge, 1H16 FFB nucleus output contracted 17%, versus full year growth guidance of 8%. Maybank KE believes the optimistic projection may need to be revised down.
- House maintains its Hold rating and TP of $0.77 for Bumitama.