First Resources output growth may exceed 5% in 2021: Maybank Kim Eng

The palm oil producer is expected to make up for its drop in net profit in the next six months.

SGX-listed palm oil producer, First Resources, could post an output growth of more than 5% in 2021, the brokerage firm, Maybank Kim Eng, said in an analysis report.

“The impact of weaker crude palm oil average selling price achieved in the first half of 2021 was mitigated by higher fresh fruit bunch (FFB) nucleus production (+10% year-on-year, YoY). For the full year, First Resources is keeping its 0-5% YoY FFB growth rate (MKE: +5% YoY) although it hopes that growth may exceed the upper range,” Maybank Kim Eng said.

However, it noted that it won’t reach its historical output ratio of 43:57, and might only hit at 45-47:53-55 for the full year.

Maybank Kim Eng noted that First Resources may indeed achieve a stronger second half growth due to the revised export tax structure that came into effect in Indonesia on 2 July.

“To top it up, First Resources has a net inventory build-up of 20,000t in the first half of 2021, which may translate to higher sales and profits in the second half of 2021,” it added.

First Resources recorded a 16.7% drop in its net profit for the first half of 2021, at US$32.6m (approximately $44.24m).


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