Written by Bloomberg
Friday, 03 September 2010 11:01
Golden Agri-Resources, part of Indonesia’s Sinar Mas Group, said the government of Liberia and Golden VerOleum (Liberia) Inc. plan to invest US$1.6 billion ($2.15 billion) in oil palm plantations in the African nation.
Showing posts with label Golden Agr. Show all posts
Showing posts with label Golden Agr. Show all posts
Friday, September 3, 2010
Tuesday, August 24, 2010
Golden Agri cut to Neutral by OSK; $0.50 target
OSK has downgraded Golden Agri-Resources (E5H.SG) to Neutral from Trading Buy, citing uncertainty stemming from Greenpeace’s allegations of plantation group engaging in environmentally harmful practices, giving false information to investors, says Dow Jones.
OSK cuts target price to $0.50 from $0.68, based on 11x FY11 earnings vs 15x previously: “The company’s chairman has previously admitted that in an organization as large as this, there are bound to be certain areas of weaknesses, which led to the company strengthening its standard operating procedures. Still, the uncertainty created by the possibility of being investigated by the authorities could weaken the stock price considerably.”
Stock off 1.8% at $0.545.
OSK cuts target price to $0.50 from $0.68, based on 11x FY11 earnings vs 15x previously: “The company’s chairman has previously admitted that in an organization as large as this, there are bound to be certain areas of weaknesses, which led to the company strengthening its standard operating procedures. Still, the uncertainty created by the possibility of being investigated by the authorities could weaken the stock price considerably.”
Stock off 1.8% at $0.545.
Tuesday, August 17, 2010
Golden Agri eyes Liberia palm oil expansion
SINGAPORE - Singapore's second-largest listed palm oil plantation firm Golden Agri-Resources said on Tuesday it was looking at investing in a firm that will control 220,000 hectares of land in Liberia.
The company, which is part of Indonesia's Sinar Mas Group, said it was planning to invest in private equity fund Verdant that is the sole shareholder of a Liberia-based firm in the process of being granted a government concession to develop 220,000 hectares for 20 years.
Golden Agri did not give financial details of the possible transaction for the land, which is three times the size of Singapore, but said the initial development will commence with 15,000 hectares.
The move comes after Indonesia announced plans to impose a two-year moratorium on new permits to clear forest for oil palm cultivation from 2011. -- REUTERS
The company, which is part of Indonesia's Sinar Mas Group, said it was planning to invest in private equity fund Verdant that is the sole shareholder of a Liberia-based firm in the process of being granted a government concession to develop 220,000 hectares for 20 years.
Golden Agri did not give financial details of the possible transaction for the land, which is three times the size of Singapore, but said the initial development will commence with 15,000 hectares.
The move comes after Indonesia announced plans to impose a two-year moratorium on new permits to clear forest for oil palm cultivation from 2011. -- REUTERS
Thursday, August 12, 2010
Golden Agr - OCBC Investment Research(Morning Call)
Golden Agri-Resources Ltd: 2Q10 Results Mostly In Line
2Q10 results mostly in line. Golden Agri-Resources (GAR) reported its
2Q10 results yesterday. Revenue climbed 28.4% YoY (+16.3% QoQ) to
US$726.2m (just 3% shy of our forecast, aided mainly by an increase in
the ASP of CPO to US$776/ton versus US$581 in 2Q09). Net profit also
showed a 19.9% rise to US$66.0m, or 8% short of our estimate; but fell
25.4% QoQ due to higher fertilizer cost from increased volume applied in
2Q10.
For the first half, revenue rose 38.1% to US$1350.8m, meeting 48.9% of
our full-year forecast, while net profit jumped 142.7% to US$154.6m, meeting
42.8% of our original FY10 estimate. One reason for the shortfall was due
to higher export taxes paid (US$26m in 1H10 versus US$3m in 1H09). We
understand that GAR also had to incur slightly higher freight costs (US$28m
in 1H10 versus US$17m in 1H09) as it is now shipping to more destinations.
Eyes lower CPO production growth. While total CPO production
(including palm kernel) showed a seasonal 12% pick up from the previous
quarter, overall production was down 13% from the year-ago quarter;
management notes that the trees are still experiencing a biological
slowdown after a peak crop in 2H09. While GAR now expects to see up to
a 5% increase in CPO production this year (vs. 10% guidance previously),
it admits that the increase will mainly come from its increased acreage
and yields could continue to remain relatively low in light of the uncertain
weather conditions.
Likely more cautious 2H10 outlook. Meanwhile, GAR has only managed
to increase its new planting by 5.9k ha, and admits that it may not be able
to achieve its 50k ha target this year, citing adverse weather conditions
and stricter NGO considerations; organic target is now at 20k ha vs. 30k
previously, with the rest from M&A (if any). GAR also expects CPO prices
to ease from current US$780 level as recent spike was due to Russia's
ban on wheat exports. Still, GAR will continue to focus on its downstream
expansion, both in China and Indonesia.
Easing fair value to S$0.655. We are lowering our FY10F earnings by
6.4% due to lower margin assumptions. Additionally, we are also lowering
our valuation peg from 18x FY10F EPS to 16x blended FY10/FY11F EPS
to account for higher market risk aversion. This drops our fair value from
S$0.72 to S$0.655 but we maintain our BUY rating as current balance
sheet strength suggests that GAR is well-equipped to handle any
turbulence.(Carey Wong)
2Q10 results mostly in line. Golden Agri-Resources (GAR) reported its
2Q10 results yesterday. Revenue climbed 28.4% YoY (+16.3% QoQ) to
US$726.2m (just 3% shy of our forecast, aided mainly by an increase in
the ASP of CPO to US$776/ton versus US$581 in 2Q09). Net profit also
showed a 19.9% rise to US$66.0m, or 8% short of our estimate; but fell
25.4% QoQ due to higher fertilizer cost from increased volume applied in
2Q10.
For the first half, revenue rose 38.1% to US$1350.8m, meeting 48.9% of
our full-year forecast, while net profit jumped 142.7% to US$154.6m, meeting
42.8% of our original FY10 estimate. One reason for the shortfall was due
to higher export taxes paid (US$26m in 1H10 versus US$3m in 1H09). We
understand that GAR also had to incur slightly higher freight costs (US$28m
in 1H10 versus US$17m in 1H09) as it is now shipping to more destinations.
Eyes lower CPO production growth. While total CPO production
(including palm kernel) showed a seasonal 12% pick up from the previous
quarter, overall production was down 13% from the year-ago quarter;
management notes that the trees are still experiencing a biological
slowdown after a peak crop in 2H09. While GAR now expects to see up to
a 5% increase in CPO production this year (vs. 10% guidance previously),
it admits that the increase will mainly come from its increased acreage
and yields could continue to remain relatively low in light of the uncertain
weather conditions.
Likely more cautious 2H10 outlook. Meanwhile, GAR has only managed
to increase its new planting by 5.9k ha, and admits that it may not be able
to achieve its 50k ha target this year, citing adverse weather conditions
and stricter NGO considerations; organic target is now at 20k ha vs. 30k
previously, with the rest from M&A (if any). GAR also expects CPO prices
to ease from current US$780 level as recent spike was due to Russia's
ban on wheat exports. Still, GAR will continue to focus on its downstream
expansion, both in China and Indonesia.
Easing fair value to S$0.655. We are lowering our FY10F earnings by
6.4% due to lower margin assumptions. Additionally, we are also lowering
our valuation peg from 18x FY10F EPS to 16x blended FY10/FY11F EPS
to account for higher market risk aversion. This drops our fair value from
S$0.72 to S$0.655 but we maintain our BUY rating as current balance
sheet strength suggests that GAR is well-equipped to handle any
turbulence.(Carey Wong)
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