Golden Agri

Golden Agri: CIMB is projecting weaker earnings in the coming quarters due to higher fertilizer costs, lower selling prices and higher tax rate. House notes 1Q12 core net profit, down 21.6% yoy on lower selling prices and higher costs, is in line with its forecasts. Highlights 1Q12 results received a boost from the sale of carryover stocks and lower effective tax rate. But these were not sufficient to offset the lower selling prices and rising estates costs. While the China agribusiness posted a 21% EBITDA drop to US$10m, it views this as commendable amid the tough operating environment for oilseed crushers there. Keeps a Neutral call with $0.75 target. The stock is flat at $0.695.