Bumitama Agri (P8Z) H1 2023 earnings summary

Executive summary

• 2Q23 marked a broad QoQ recovery: revenue rose 9%, net profit 77% and EBITDA 99%, supported by stronger production, higher sales volumes and slight ASP gains.

• Management expressed growing confidence that the low cycle was behind, with H2 2023 production expected to account for the larger share of full-year output.

Financial highlights

• H1 2023 revenue was IDR 7,495,925 million, down 16.4% YoY; gross profit fell 42.9% to IDR 2,153,667 million.

• Net profit attributable to owners was IDR 1,189bn, down 45% YoY; EBITDA was IDR 2,056,659 million, down 45.5%.

• Profit before tax fell 44.1% to IDR 1,834,101 million; profit for the period declined 45.3% to IDR 1,420,599 million, and EPS fell to IDR 686 from IDR 1,247.

• 2Q23 revenue was IDR 3,901bn, net profit IDR 760bn and EBITDA IDR 1,369bn, up 9%, 77% and 99% QoQ, respectively.

Outlook and guidance

• H2 2023 production is expected to contribute the larger share of full-year output; management viewed 2Q recovery as a transition toward a more supportive environment.

• Potential CPO price support in H2 includes an expected El Niño return and higher biodiesel demand under Indonesia’s B35 programme.

• Focus areas include business continuity, innovation, process improvement, technology adoption and cost management.

• Management expressed confidence the low cycle may be behind, while noting uncertainty over whether palm oil prices would keep declining in 2024 or rebound.