Indofood Agri Resources (IndoAgri)

Business Times - 30 Apr 2011

Indofood Agri Q1 net profit soars 66% to 514b rupiah

By FELDA CHAY

THE combination of higher selling prices and sales volumes for palm products helped lift Indofood Agri Resources' net profit for its first quarter to 514.3 billion rupiah (S$73.6 billion) - 66 per cent higher than the 309.8 billion rupiah it earned a year ago. This brings earnings per share for the three months ended March 31, 2011 to 5.1 cents, up from 3.1 cents a year earlier.

Net profit, including minority interests, was 734 billion rupiah, up 81.2 per cent. Revenue was up 38.6 per cent to 2.93 trillion rupiah, from 2.1 trillion rupiah last year.

In its financial statement released before the market opened yesterday, the Indonesia-based plantation owner said that crude palm oil (CPO) prices remained strong in the first quarter, with CIF Rotterdam prices averaging US$1,251 per tonne for the period, as compared with US$1,108 per tonne in the fourth quarter of 2010.

'This demonstrates the positive fundamentals for palm oil supported by tighter vegetable oil supplies,' said Indofood Agri. 'This is further supported by the improved global economic climate, underpinned by consumption growth from India, China and other emerging Asian economies, and coupled with demand for biodiesel driven by government mandates in Europe, Brazil and Argentina.'

The group said it expects demand for palm oil products in Indonesia to remain supported in the short to medium term on the back of the population growth there, and demand from the food-and- beverage industry.

Indofood Agri, which has also branched out into rubber and sugar business, added that prices for the two commodities were also higher in the first quarter compared with the preceding three months, and that rubber prices are likely to stay high on the back of a strong automotive sector in emerging markets, and a supply deficit caused by wet weather in Thailand and Malaysia.

On sugar, the 'price direction will be in part determined by production in Brazil and India, and whether India is a net importer or exporter of sugar', said Indofood Agri.

Goldman Sachs noted that the latest set of results does not include a 'meaningful contribution' from the sugar business, as the sugar mill and refinery will be commissioned only later in the year. 'On balance we see the results as being ahead of expectations,' said Goldman. 'We suspect that the stronger-than-expected performance is largely due to lower-than-expected CPO production costs. ASPs (average selling prices) for the quarter were ahead of our full-year estimate, but we see Q1 2011 as the peak for CPO prices and hence ASPs should moderate, going forward.'

As at March 31, Indofood Agri had cash and cash equivalents of 3.6 trillion rupiah, compared with about 2 trillion rupiah a year ago. Net asset value per share was 7,960 rupiah at end-March, a rise from 7,605 rupiah at end-December last year.

Yesterday, Indofood Agri shares closed 1.9 per cent, or four cents, lower at $2.08.

(Not Vested)

CPO prices have been on a downtrend since the start of 2011. Palm oil players like IFAR and WIL have gone down along with it, despite IFAR's better results..

Business Times - 24 May 2011

IndoAgri shares dive to 18-month low

IPO pricing of its Indonesian unit seen as main cause

By FELDA CHAY

THE bloodletting would not stop for Indofood Agri Resources. Yesterday, shares of the Singapore-listed company tumbled 15.7 per cent to an 18-month low, largely in reaction to the palm plantation group's Friday announcement that it had priced the Indonesia initial public offering of subsidiary PT Salim Ivomas Pratama (SIMP) at 1,100 rupiah a share.

The offer price per share is at the lower end of the 1,060-1,700 rupiah indicative price range. Since announcing palm oil producer SIMP's listing on Feb 18 this year, IndoAgri's shares have plunged from $2.46 to yesterday's $1.72.

Yesterday alone saw a 32-cent dive after about 83 million shares changed hands, making it the third-most actively traded stock. Not helping the situation was the regional market fall, which in Singapore saw the Straits Times Index dropping by 1.8 per cent.

According to JP Morgan, its calculations show that 'the PT SIMP IPO is valuing IndoAgri at just $1.41 per share', a 30.9 per cent discount to its Thursday close before factoring in any upcoming mergers and acquisitions, and any holding company discount. Trading of IndoAgri's shares was halted on Friday.

The US$408 million in proceeds that will be raised from the offering would just be sufficient for SIMP's planned debt repayment of US$200 million, and capital expenditure of around US$200 million, said JP Morgan.

After the IPO, IndoAgri's stake in SIMP will decline to 72 per cent from 90 per cent.

In a report, Goldman Sachs noted that 'the IPO could pose downside risks to our IFAR (IndoAgri) earnings estimates through potential EPS (earnings per share) dilution, as well as possible holding company discount once its main operating asset is listed separately'.

It believes that IndoAgri's 2011 earnings per share could be diluted by 12 per cent.

Last month, IndoAgri said that net profit for its first quarter rose to 514.3 billion rupiah (S$73.6 million) - 66 per cent higher than the 309.8 billion rupiah it earned a year ago.

The rise, which came on the back of higher selling prices and sales volumes for palm products, took earnings per share for the three months ended March 31 to 5.1 cents, up from 3.1 cents a year earlier.

Revenue was up 38.6 per cent to 2.93 trillion rupiah, from 2.1 trillion rupiah last year.

Singapore Hot Stocks-Indofood Agri up after it downplays unit''s IPO (2011/06/01 11:13AM)

--------------------------------------------------------------------------------

SINGAPORE, June 1 (Reuters) - Shares of Singapore-listed
Indofood Agri Resources rose as much as 2.5 percent on
Wednesday after it said palm oil plantation unit PT SIMP''s
listing will not dilute earnings as much as analysts had feared. At 0229 GMT, shares of Indofood Agri were 1.8 percent higher
at S$1.66 with over 10.7 million shares changing hands.
"The company clarified that the dilution on earnings will
not be has bad as many analysts had expected. Moreover, their
netasset value will be higher post IPO, so their shares are
rebounding a little after falling quite a bit," said a local
trader.
Indofood Agri said its earnings per share in 2010 will be
835 rupiah after the IPO, down from 974 rupiah previously. However, its net asset value per shares after the listing would
rise to 7,843 rupiah from 7,605 rupiah. [ID:nSNZ9tPkYY]
Indofood Agri shares have fallen about 19 percent since it
announced the initial public offering of its unit PT SIMP in
May,which triggered concerns the listing would dilute its
earnings per share. [ID:nL3E7GN01U]

Jun 8, 2011
IndoAgri feels investors' wrath
Share price drops by nearly a third after it hives off profitable subsidiary for Jakarta listing
By Goh Eng Yeow, Senior Correspondent

SOOTHING words from analysts have failed to assuage investors' unhappiness with Indofood Agri Resources for hiving off its highly profitable Indonesian subsidiary as a separately listed firm.

Since April, IndoAgri's share price has dived as much as 29 per cent as shareholders voted with their feet, following the company's decision to list Salim Ivomas Pratamas (Simp), its main earnings contributor, on Jakarta's stock exchange.

Simp's impending listing debut in Jakarta has done little to lure investors back. IndoAgri ended a mere three cents higher at $1.73 yesterday on a trading volume of 7.27 million shares - a far cry from the $2.31 close it registered on April 1.

Concerns have been voiced by unhappy investors that IndoAgri may have priced Simp too low when it was hived off. The Simp IPO was fixed at 1,100 rupiah (15.9 Singapore cents) a share, at the low end of an indicative price range of 1,060 rupiah to 1,700 rupiah a share.

'Based on the 1,100 rupiah a share, we calculate the implied net asset value for IndoAgri at $1.40 a share. In addition, we estimate a 2011 earnings per share dilution of 12per cent,' said Goldman Sachs in a recent report.

Investors have also expressed concern that as Simp was IndoAgri's main operating asset, the Singapore- listed firm might be reduced to an investment holding concern after its listing.

This might dampen its share price, as investment companies usually trade at a discount to their sum-of-parts valuations.

But some analysts believe that the selling may have been overdone.

In a recent report, BNP Paribas analyst Michael Greenall noted that IndoAgri might not necessarily suffer a large holding company discount since it is listed in Singapore while its assets are separately listed in Jakarta.

As a result of the listing, IndoAgri would cut its stake in Simp from 90per cent to 72per cent, with Simp raising US$384.6million (S$472million) from its Indonesian IPO, after deducting expenses.

Mr Greenall noted that, with a market value of 17.6 trillion rupiah based on its IPO issue price of 1,100 rupiah, Simp will be the second-largest plantation company by market value in Indonesia after Astra Agro Lestari when it is listed.

TA Securities, which has a buy call on the counter, said that even after applying a 10 per cent discount on its sum-of-parts valuation on IndoAgri, it had arrived at a target price of $1.92 for the counter.

It also noted that IndoAgri had a $230 million cash hoard which it can use to acquire agricultural assets. 'Management is being open on the preferred choice, although we think palm oil, rubber and sugar will remain the priority, given their expertise in these fields,' it said.

TA also believed that IndoAgri management 'will be prepared to gear up ahead to fund any acquisitions', given its low debt levels after the Simp listing.

'Assuming a comfortable net gearing ratio of 0.7 times, we estimate the group could borrow up to $1.7billion,' it said.

JPMorgan, which also has an 'overweight' call on IndoAgri, said concerns had been raised about Simp possibly getting hit by a higher cash tax expense, as it makes the transition from Indonesian accounting rules to international accounting standards, because of its listing.

However, it believes this is not the case as other SGX-listed firms with Indonesian plantation assets, such as Wilmar International and Golden Agri Resources, have adopted similar accounting treatment without suffering a cash tax implication.

engyeow@sph.com.sg

Anyone can help me with the net asset value or book value for this company?

In the most recent 1Q2013 annual report states NAV per share is 1.24SGD or ~13,981,206Rp net asset value converted to Rp and multiple by 1434 million shares..

but in the balance sheet net asset is listed as 22,984,355Rp or 2923SGD (in millions). in this case divided by 1434 million shares should be 2.03SGD per share

can any expert take a look pls ??

(14-05-2013, 12:35 PM)BlueKelah Wrote: In the most recent 1Q2013 annual report states NAV per share is 1.24SGD or ~13,981,206Rp net asset value converted to Rp and multiple by 1434 million shares..

but in the balance sheet net asset is listed as 22,984,355Rp or 2923SGD (in millions). in this case divided by 1434 million shares should be 2.03SGD per share

Look in the balance sheet:

Equity Attributable to owners of the Company= 13,903,402
Equity Attributable to Non controlling interests = 9,080,953
Total equity 22,984,355

u should use 13903402 Rp/(7816*1434)=1.24 SGD/share.

thank you for the quick reply alphaquant understood now..

so means the other part of the equity is attributed to other non controlling interest.

this means controlling interests do not own the complete company and some other person/company has almost half the non-controlling shares.

sorry edited -- they did seperate the EPS to include the non-controlling interest share...

(14-05-2013, 01:11 PM)BlueKelah Wrote: this means controlling interests do not own the complete company and some other person/company has almost half the non-controlling shares?

i am not an accountant so not sure if i am completely factual. Someone pls correct me if need be.

consider A purchases 80% of B, so B is now a subsidiary hence balance sheets should be consolidated. The 20% of B which is not owned by A should fall under non-controlling interests so that ultimately numbers must balance.

(14-05-2013, 01:23 PM)AlphaQuant Wrote:

(14-05-2013, 01:11 PM)BlueKelah Wrote: this means controlling interests do not own the complete company and some other person/company has almost half the non-controlling shares?

i am not an accountant so not sure if i am completely factual. Someone pls correct me if need be.

consider A purchases 80% of B, so B is now a subsidiary hence balance sheets should be consolidated. The 20% of B which is not owned by A should fall under non-controlling interests so that ultimately numbers must balance.

The statement is correct.

Base on the numbers posted previously, it is likely a major subsidiary of only approx 60% of controlling interest.