Indofood Agri: (S$0.465) 2Q16 dragged by adverse effects of dry weather
- 2Q16 swung into core net loss of Rp11.6b (2Q15: Rp24.6b profit), bringing 1H16 loss to Rp79.7b (1H15: Rp117.1b profit). a far cry from FY16 consensus estimate of Rp446b.
- Revenue slumped 13.7% y/y to Rp3.57t, weighed by lower palm production arising from the impact of the El Nino in 2H15.
- Going forward, IFAR will be building three new mills in Malaysia to raise CPO production, as well as expanding two existing mills to increase FFB production capacity.
- At the current price, IndoAgri trades at a forward P/E of 15.2x. The street has 3 Buy, 4 Hold and 4 Sell ratings on the counter with average TP of $0.47.
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