What will improve Bumitama's cash flow over the next few years?

It eyes using its cash flow to reduce bank borrowings first.

Bumitama Agri's CEO Pak Gunawan Lim is keen to engaging the investment community more to address investors’ concerns and the company’s outlook, RHB said in its latest report.

According to the brokerage firm, Bumitama's focus will be on the upstream operation. "Biodiesel is just a small business and is not expected to grow aggressively. Any expansion on biodiesel will only come if there is a firm buyer for the additional volume. Management will not consider a big capex to build downstream capability even via a joint venture. At most, it will consider forming alliances with downstream players in terms of CPO supply," RHB said.

Meanwhile, the report also noted that the group's cash flow is expected to improve over the next few years. This will be on the back of good production growth, low capex as new planting slows down significantly and on the back of good selling prices for palm products.

"BAL will use the cash flow to reduce bank borrowings and build up its war chest for any good upstream M&A, and for any potential higher dividend payouts in the future," RHB said.

Also Read

First Resources refutes ties to rainforest clearing in Indonesia

Olam Agri expands funding mix with $625M Murabaha facility

Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

I want to download the media kit