Earnings in line for Genting Plantations

KUCHING: Genting Plantations Bhd (Genting Plantations) saw its core net income (CNI) for the first nine months of financial year 2017 (9MFY17) of RM232.6 million was broadly within expectation, meeting 67 per cent of consensus full year forecasts.

As expected, no dividend is announced in the third quarter, said MIDF Amanah Investment Bank Bhd (MIDF Research) in a note yesterday.

“Its 9MFY17 CNI climbed 50 per cent year on year (y-o-y) to RM232.6 million due to double-blessing of higher fresh fruits bunch (FFB) production and higher crude palm oil (CPO) price.

“We gather that the decline in CNI by 18 per cent y-o-y to RM79.1 million in 3QFY17 is caused by the drop in FFB production from its Sabah estates, which was caused by the lagged impact of dryness in 2016,” it said.

“The decline is expected to be temporary as production has improved y-o-y in October.

“Hence, we expect 4QFY17 CNI to register yoy growth mainly backed by double digit growth in FFB production and stable palm oil price.”

MIDF Research maintained its earnings estimate and FY17 CNI forecast of RM337 million. It also maintained its FY18 CNI forecast of RM385 million.

“We like Genting Plantations due to strong 9MFY17 earnings surge of 50 per cent y-o-y to RM232.6 million and robust FY17 FFB growth expected at 13 per cent due to its young age profile.”