♦ Affected by tree stress and low plasma yields. First Resources’ (FR) 1HQFY10 core net profit was below our and consensus estimates, making up 30-33% of FY10 projections, due to lower-than-expected FFB production of -9.6% yoy (-8.3% yoy from nucleus plantations and -21.4% yoy from plasma farmers) in 1H10 vs. our FY10 projections of +4.2% yoy. Management attributed the lower nucleus production to tree stress, while the lower growth from its plasma farmers was due to the effects of lower fertiliser application in 2007/2008, when fertiliser prices were very high. FR declared a 1 (S$) cent dividend in 2Q0 (2QFY09: 1 cent), translating to net payout of 30%, slightly higher than our projected 23% for FY10.
First Resources Limited Berhad : Let Down By Tree Stress And Plasma Farmers - 16/08/2010
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