PhillipCapital cuts Golden Agri-Resources' FY13 earnings estimates by 19%

Driven by paltry 3Q13 performance.

Golden Agri-Resources reported 3Q13 net profit of US$36mn (-38.5% QoQ, -59.8% YoY), excluding exceptional items, bringing 9M13 core net profit to US$203mn (-44.7% YoY), accounting for 54%/58% of PSR/consensus full-year forecast.

"The weak performance was due to lower CPO prices, which fell by ~23% YoY during the period, higher operating costs and higher inventory levels," said PhillipCapital.

"China operation has a slight net loss of US$2mn in 3Q13, after two quarters of positive trend, indicating that the operating environment in China remains unstable for the group," it added.

This led PhillipCapital to trim their FY13E earnings estimates by 19% mainly on the higher operating cost assumptions to reflect weaker 3Q13. But the research firm left their FY14E/15E estimates intact.

The group also declared an interim dividend of 0.585 SG cents (vs. 0.6 SG cents last year), given what it considers Golden Agri's "strong cash position and limited M&A investment opportunities at this point in time."

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