, Singapore

Is Bumitama Agri up for a good harvest in 2018?

Fresh fruit bunches grew at a healthy 20% in Q1.

Bumitama Agri is well-positioned for a positive growth ahead amidst stable earnings and strong growth in fresh food bunches (FFB), according to RHB Research.

FFB clocked in at 20% YoY as more than 2,000 hectares of land camte into maturity in the first quarter of the year. FFB output and earnings are poised to taper towards the second half of the year amidst seasonality of production.

FFB unit costs also dropped 16% YoY amidst lower fertiliser application and higher FFB yields.

“Strong improvement in operating cash flow provides more room for capex funding and potential M&As,” RHB added.

Bumitama has plenty of landbank to develop after planting 770ha of land in 2017. RHB Research notes that the company remains on track to hit its 2018 new planting target of 3,000ha, at a cost to maturity of USD8,000/ha.

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