Bumitama Agri’s profits bloom 26% to $23.58m in Q1

Thanks to an inventories drawdown from 4Q15’s crop.

Blooming profits punctuated Bumitama Agri’s (BAL) 1Q16, as the company posted a profit jump of 26% YoY to IDR229b ($23.58m).

According to a report by Maybank Kim Eng (Maybank KE), BAL’s earnings growth comes despite the weak fresh fruit bunch (FFB) output of 313,887 MT, and the US$50/t CPO export levy.

On the flip side, the impact on BAL’s profits was mitigated by a drawdown in inventories from 4Q15’s crop.

Meanwhile, BAL has taken a defensive stance to sell forward 195,000 MT of 2H16’s output to Wilmar, with prices ranging from IDR7,182-7,364/kg. This amounts to MYR2,450/t (before CPO export tax) at the point of contract.

Maybank KE further notes that in the latter half of 2H16, FFB output will be the strongest to play catch up.