Astra Agro Lestari (AALI.IJ, HOLD): 1Q12 earnings came lower than our and
consensus forecast
lower than our and consensus forecasts. Lower than expected earnings was
partially caused by lower 1Q12 ASP realisation of Rp7,706/kg compared to
Rp8,278/kg in 1Q11.
Astra Agro Lestari (AALI) reported 1Q12 net profit of Rp378b (-42.2% YoY), much
costs of production (+9.1% YoY) and operating expenses (+32.4% YoY). Note that
labor costs, which normally account for around 40% of total cost, grew by 20% YoY,
higher than our expectation.
In addition to lower 1Q12 CPO price, negative earnings growth stemmed from rising
38.9% in 1Q11.
Higher 1Q12 expenses resulted in operating profit margin contraction to 28.6% from
Analyst Comment:
quarters, we believe that unexciting earnings growth will continue to persist.
While we expect earnings recovery on stable CPO price to occur in the following
of 15.7x.source: KIMENG Equity Daily dated 25 April 2012Retain HOLD rating and maintain TP of Rp25,500, translating to implied 2012 PER
