Kencana Agri

Kencana Agri seems to have fallen alot from beginning of year till now. Time to buy in at value?

Kencana issued profit warning today:-

http://infopub.sgx.com/FileOpen/KencanaA...eID=376590

Get ready for the bad news when they announce results

http://infopub.sgx.com/Apps?A=COW_CorpAn...013322a3e9

Kencana Agri announced today on the last day for year end results.

Operating profit halved as compared to prior year:-
http://infopub.sgx.com/FileOpen/KAFinanc...eID=391904

Loss on foreign exchange ballooned 215%!!!
Why so huge?!?!

Also noted it reported fair value gains on biological assets of US$6m for the year. Noted all other oil palm companies reported fair value losses in BA for the year while Kencana is the exceptional case.

Any financial gurus can help interpret?

Monday, 21 Mar, 2016 Bad El Nino is good for palm prices, says OCBC SINGAPORE (March 18):

Shares of Singapore-listed palm oil producers and traders have risen in recent sessions.Year to date, Golden Agri-Resources is up 6.62% to 42.5 cents while Wilmar International is up 6.07% to $3.30.OCBC says the strongest El Nino phenomenon since 1997-1998 will hurt palm production and continue to drive up prices.Palm oil futures for June delivery rose to its highest intraday level since April 2014 of 2,654 ringgit per metric ton as extreme heat threatens palm production and harvest efforts, OCBC says.With stronger exports from both Malaysia and Indonesia, and accounting for higher demand during Ramadan in June, "palm oil as a commodity would likely be scarcer than before," adds the bank. - See more at: http://www.mpoc.org.my/Bad_El_Nino_is_go...aOUld.dpuf

Just checking which website can we see the market CPO prices? CPO prices increasing which should be good news to these Palm Oil companies. I have missed the boat, not sure how far could CPO prices climbs back.

(22-03-2016, 08:25 PM)butcher Wrote: Just checking which website can we see the market CPO prices?  CPO prices increasing which should be good news to these Palm Oil companies.  I have missed the boat, not sure how far could CPO prices climbs back.

http://www.indexmundi.com/commodities/?c...&months=60
You can also use the MYR based data http://bepi.mpob.gov.my/index.php/statis...nthly.html. 

Palm was always a headache to calculate a forecast as I need to consider multiple currencies (USD, MYR, IDR, and SGD). 

I don't really think you've missed the boat. I hope you are not too early.

NOt sure about Kencana Agri but Golden agri earnings would not be affected by CPO price immediately. 

Also, do note that palm is the easy target by NGOs for deforestation, global warming/cooling, extinctions of animals, orangutans.... It's also the default boycott target when there's haze. The campaigns against palm is so great that anything positive about palm industry is a "green washing". 
Using 5.5% of world oil seed agri land, Palm produces >30% of the world veg oil. Palm is cheap and easy to maintain. Even a mediocre small farmer could get 4x oil/hectare vs any other oil crops - easily 6-8x oil/hectare vs other oil seed. Oil is carbon based - to produce that much oil/hectare, palm plantation absorb up to 10x more carbon dioxide/hectare vs other oil crops. 

Not siding anyone but palm plantations simply going to spend more and more money to prove what they did not do, one rule after another. As investor, this is always a risk I have to consider.

Thank you Pak Raks.

However, curious to understand why Golden Agri not affected by the increasing CPO prices?

Due to their future production being hedged at certain sale prices?

Appreciated your sharing of palm oil knowledge

(22-03-2016, 11:30 PM)butcher Wrote: Thank you Pak Raks.  

However, curious to understand why Golden Agri not affected by the increasing CPO prices?

Due to their future production being hedged at certain sale prices?  

Appreciated your sharing of palm oil knowledge

I like Indonesia. But having some knowledge in palm industry doesn't make me an Indonesian.   I think better reply in GAR tread.