10 Quick Numbers For Investors To Understand Bumitama Agri Ltd

Bumitama Agri Ltd (SGX: P8Z) is a palm oil producer. It got listed in April 2012 and its share price is currently near an all-time low. As a result, it could be a company that piques the interest of bargain hunters.

As a palm oil producer, Bumitama Agri’s primary business activities are the cultivation of oil palm trees, the harvesting of fresh fruit bunches, the processing of the bunches into crude palm oil and palm kernel oil, and the sale of the oils to refineries. Bumitama Agri mainly operates in three provinces in Indonesia, namely Central Kalimantan, West Kalimantan, and Riau.

Investors who are keen to learn more about Bumitama Agri may want to pay attention to the 10 numbers below that will provide an overview of the company’s business:

1. The five-year revenue growth rate: Bumitama Agri’s revenue has nearly doubled from IDR 2,805 billion in 2011 to IDR 5,542 billion in 2015. This translates to an 18.6% annual compound growth rate for that period.

2. The five-year net profit growth rate: But, the company’s net profit attributable to shareholders has grown by just 16.9% in total from 2011 to 2015, climbing from IDR 761.9 million to IDR 890.7 million.

3. Growth in production over last five years: In the same timeframe as above, Bumitama Agri’s fresh fruit bunches production has grown at a compound rate of 21% per year from 1.066 million tonnes to 2.29 million tonnes.

4. The FFB yield per hectare: For a palm oil producer, the FFB yield per hectare measures the average amount of FFB (measured in tonnes) produced per hectare of land.

Source: Bumitama Agri annual report

The table above shows the FFB yield for Bumitama Agri from 2011 to 2015. For perspective, First Resources Ltd (SGX: EB5), another Indonesia-based palm oil producer, had a FFB yield of 19 tonnes per mature hectare in 2015.

5. The CPO extraction rate: As you can see from the table below, Bumitama Agri’s CPO extraction rate has been declining from 2011 to 2015.

Source: Bumitama Agri annual report

6. Gearing: Bumitama Agri’s total debt to equity ratio as of 30 September 2016 is 80.6%.

7. Dividend policy: Bumitama Agri has a dividend policy to distribute up to 20% of its distributable income as a dividend. In 2015, the company’s dividend per share was 0.5 Singapore cents. This works out to be less than 10% of 2015’s earnings per share of S$0.052.

8. The price-to-earnings ratio: At its current share price of $0.78, Bumitama Agri has a price-to-earnings ratio of 14. For perspective, this is slightly higher than the SPDR STI ETF’s (SGX: ES3) price-to-earnings ratio of 12. The SPDR STI ETF is an exchange-traded fund that tracks the Straits Times Index (SGX: ^STI).

9. The price-to-book ratio: Bumitama Agri is valued at 2.6 times book value at its current share price. This is also higher than the SPDR STI ETF’s price-to-book ratio of 1.2.

10. Two major shareholders: Bumitama Agri has two major shareholders, namely Wellpoint Pacific and IOI Corporation Bhd (KLSE: 1961.KL). As of 15 March 2016, the two shareholders collectively own 81.93% of Bumitama Agri’s total shares. Wellpoint Pacific is linked to Lim Gunawan Hariyanto, the chief executive of Bumitama Agri. Meanwhile, IOI Corp is a major palm oil plantation player listed in Malaysia and is controlled by Tan Sri Dato’ Lee Shin Cheng.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn’t own shares in any companies mentioned.