Bumitama Agri’s FFB yield plummets 24% to 3.1t/ha

Last year’s El Nino is still hurting output.

Bumitama Agri (BAL) is still reeling from 2015’s El Nino, as the agribusiness firm’s 1Q16 fresh fruit bunches (FFB) yield contracted 24% YoY to 3.1t/ha.

According to a report by Maybank Kim Eng, in terms of output, FFB nucleus output was 313,887 MT. This comes up meagre compared to BAL’s FFB group growth guidance of 8% for 2016.

There remains hope, though, as 1Q16 weak output could be partly mitigated by increased sales from the drawdown of inventories brought forward from last year.

In 1Q16, the Malaysian Oil Palm Board’s spot crude palm oil (CPO) price averaged US$576/t (or roughly $779.76/t). Taking into account the US$50/t CPO export levy imposed by the Indonesian government since 16 July last year, the actual CPO price proceeds revived will be even lower YoY.

With the low output, low CPO average selling price, and IDR 110b (roughly $11.26m) new annual depreciation charges effective 1 January 2016, Maybank KE expects BAL to report Q1 profits of IDR100-140b ($10.23-14.33m).

Moreover, the worst may not be over. Maybank KE further cautions that FFB yield and output growth may continue to show YoY contractions in Q2 such that BAL may not fully benefit from the recent CPO price hike.

The people you want to reach are already in this room.

Every quarter, SBR lands on the desks of the founders, CFOs, and directors running Asia's most consequential companies. Every day, they open our newsletter and read our website. It's a room that took twenty years to build — and it's the one most of our partners are trying to get into.

The good news is that the door is open. We work with companies on thought leadership articles, sponsored content, industry summits across Southeast Asia, regional awards programmes, podcasts, and media placements in print and digital. The shape of the right partnership depends on what you're trying to do, which is why we'd rather start with a conversation than send a rate card.

If you have something this room should know about, tell us. We'll tell you honestly whether we can help, and how.

No rate cards until we understand the brief. It's a better use of everyone's time.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia