Bumitama Agri (P8Z) H1 2024 earnings summary

Executive summary

• Revenue rose 1.4% YoY to IDR7,600bn, while profit for the period fell 29.5% to IDR1,002bn, mainly due to FX losses and higher external FFB purchase prices.

• 2Q24 profitability strengthened QoQ despite a 4% revenue decline: gross profit rose 19%, net profit 61%, EBITDA 41% and core profit 43%.

• 1H24 core profit was IDR907.17bn, down 14% YoY; improving prices and easing cost pressure supported the 2Q24 rebound.

Financial highlights

• Cost of sales increased 8.6% YoY to IDR5,801bn, outpacing revenue growth; gross profit fell 16.5% to IDR1,799bn.

• EBITDA declined 12.9% YoY to IDR1,792bn; general and administrative expenses fell.

• Profit before tax fell 30.2% to IDR1,280bn; income tax expense declined 32.8% to IDR278bn.

• Profit attributable to owners fell 27.9% to IDR857bn; basic and diluted EPS decreased to IDR494 from IDR686.

• Net FX result shifted to a loss of IDR65bn from a gain of IDR174bn, mainly from translating USD borrowings after IDR depreciation.

Outlook and guidance

• Higher productivity and a stronger FFB contribution are expected in H2, following muted 2Q output caused by lower bunch count.

• Palm oil prices are expected to trend upward through year-end, supported by export demand; a possible B35-to-B40 biodiesel blend increase could add 1.5–2.0mn tonnes of consumption.

• Priorities include business continuity, innovation, digitalisation, mechanisation and cost management; delayed PP&E projects are targeted for faster execution in 2H.

• Median of 30 trader estimates puts Malaysian benchmark futures at MYR4,000/t by year-end; stated Indonesian equivalent is IDR12,750/kg, factoring in export-tax differences and current FX rates.