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10 Quick Things Investors Should Know From Bumitama Agri Ltd’s Latest Earnings

In late February, Bumitama Agri Ltd (SGX: P8Z) released its 2017 fourth quarter and full year earnings update.

As a quick introduction, Bumitama Agri is a palm oil producer. Its primary business activities are the cultivation of oil palm trees, the harvesting of fresh palm fruit bunches, the processing of the bunches into crude palm oil and palm kernel oil, and the sale of the oils to refineries.The company has over 180,000 hectares of plantation land located in three provinces in Indonesia, namely, Central Kalimantan, West Kalimantan, and Riau.

Here are 10 things investors should know about Bumitama Agri’s latest results:

1. Revenue for the reporting quarter decreased 9% year-on-year to IDR 2,066 billion. For the whole of 2017, revenue grew 6% to IDR 8,131 billion.

2. Profit before interest and taxes (PBIT) for the fourth quarter declined by 20.4% year-on-year to IDR 591 billion. PBIT for the whole year was up 1% to IDR 1,894 billion.

3. EBITDA (earnings before interest, taxes, depreciation and amortization) for the reporting quarter declined by 12.2% year-on-year to IDR 731 billion, but increased by 26.1% to IDR 2,427 billion for the full year.

4. Profit attributable to shareholders for the fourth quarter fell by 19.2% year-on-year to IDR 455 billion. For the whole of 2017, profit attributable to shareholders was up by 18.7% to IDR 1,193 billion.

5. The gross margin for the reporting quarter declined from 39.4% in 2016’s fourth quarter to 33.0%. Similarly, the EBITDA margin declined from 36.7% to 35.4%% over the same period.

6. Bumitama Agri generated operating cash flow of IDR 464 billion in the fourth quarter of 2017, down compared to IDR 660 billion in 2016’s fourth quarter. For the whole of 2017, operating cash flow was IDR 1,883 billion, up 37.2% from 2016.

7. As of 31 December 2017, Bumitama Agri’s total borrowings stood at IDR 4,410 billion, up from IDR 3,860 billion at end-2016. Meanwhile, its cash and cash equivalents decreased from IDR 517 billion to IDR 217 billion. These numbers show that Bumitama Agri’s balance sheet has weakened.

8. In the fourth quarter of 2017, the company’s fresh fruit bunches (FFB) production declined by 16.3% year-on-year to 910,025 tonnes.

9. The company’s sales volumes also fell during the reporting quarter. Volume for: (a) Crude palm oil (CPO) was down 11.7% year-on-year to 207,617 tonnes; (b) palm kernel was down 13.9% to 41,647 tonnes; (c) biodiesel fell 25.6% to 6,414 tonnes; and (d) glycerine sank by 32.3% to 982 tonnes.

10. In the fourth quarter of 2017, the average sales price of the company’s products actually did well. The price for: (a) CPO rose 4.8% to IDR 8,140 per kg; (b) palm kernel climbed 1.5% to IDR 7,461 per kg; and (c) glycerine soared 609.7% to IDR 1,533 per kg. The only laggard was biodiesel, whose sales price dipped by 2.25 to IDR 9,911 per kg.

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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.