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(26-06-2014, 09:18 PM)BlueKelah Wrote: [ -> ]
(26-06-2014, 04:44 PM)muns Wrote: [ -> ]Does anyone know the reason why Indofood (Plantations are inclusive of SIMP and Lonsum) FFB yields are considerably low, given that their average age profile are seemingly in the prime?

It's significantly lower than their peers in the SEA region for a plantation with planted area of such a size. And its also not a one off event, it has been getting such below average yield for the past 4-5 years!

In my opinion, P/B isn't a very good metric to value such plantation companies as their FV Gains differ very widely even throughout the region and they aren't in the business of selling more plantation land (Rather they want to buy, but it has been getting very pricy in Peninsula Msia, things are starting to heat up in Kalimantan and East Malaysia.
Finding the Value in a Speculative World

read the post above yours. Just poor farm practice such as using less fertiliser, not enough pest control, planting trees too close together, etc...

Hi BlueKelah,

Thanks for referring me above. If it's an issue with their tree, it's a very expensive 25 year problem haha.

Just wanted to find out if anyone knows their harvesting cycle days. I just want to check if it's a solvable issue ie. not enough harvesters, fertilisers etc. But if it's an issue with the planting of trees, then it's on a whole other playing field and not much can help increase their productivity then. By any chance does anyone know their harvesting days, from my knowledge, Indo and east msia can be <10 and pen msia is ard 12 (the better ones).

Do you know if they disclose the number of trees per ha? Or is it because they plant on non-flat terrain which could justify their 10-20% lower yield to a certain extent. But with their large planted area including lomsum and simp, it might be more of a group culture than just hilly terrains!
Finding the Value in a Speculative World
They are probably more busy making instant noodles than caring for the trees Big Grin

Heads up to Singaporean and Malaysian buddies, I think smog season is coming again???
(27-06-2014, 06:40 PM)BlueKelah Wrote: [ -> ]They are probably more busy making instant noodles than caring for the trees Big Grin

Heads up to Singaporean and Malaysian buddies, I think smog season is coming again???

Haha nice one there Big Grin

Yep, smoky times is expected soon, generally coinciding with the planting season of palms in Q3. But what's interesting is that more often then not, it's not the big players that burn (Cos they wanna comply with the standards), but its just the small holders close to them that use burning.

The big boys can't do much about the smallholders if they are not on their land and in the event where the fire is underground (Especially on peat soil by the smallholders) it inevitably spreads close to the big players and there's not really much they can do to stop the small holders or natives that allegedly use slash-and-burn for their padi fields as well :o

If I am not mistaken, to avoid this, some of the larger listed players have recently avoided buying land that's on peat)
Finding the Value in a Speculative World

IndoAgri Q3 net profit inches up 1.6%
31 Oct5:50 AM

DEFYING a recent decline in commodity prices, edible oils and fats products maker IndoAgri posted a 1.6 per cent rise in net profit attributable to shareholders for the third quarter ended Sept 30, 2014 to 124.8 billion rupiah (S$13.2 million).

Its third-quarter revenue
Response to The Straits Times article titled “PepsiCo cuts ties with palm oil supplier over abuse claims” on 25 January 2018

The company's response :
Quote:We refer to the Straits Times article titled "PepsiCo cuts ties with palm oil supplier over abuse claims" on 25 January 2018. We have not been a supplier to PepsiCo since early 2017, and this has not had a material impact on our business. Most of our plantations are certified under the RSPO (Roundtable for Sustainable Palm Oil) and ISPO (Indonesian Sustainable Palm Oil) certification schemes for sustainability.

The Company wishes to state that as a public listed company we comply with the labour laws and regulations of the Indonesian Government. We do not have any dispute or outstanding issue with any of our Labor Unions (we have a total of 10 Labor Unions) or the Indonesian Ministry of Labor. We have also recently received a good compliment and zero accident award from the Indonesian Ministry of Labor.
Indofood Agri has been falling and hitting new all-time lows in recent months. Today it sprang up 20% on high volume. Even so, it is still price at only 0.24 its book value. Could this stock be undervalued?

Indofood Agri is a holding company with no operations in Singapore. All its operations are in Indonesia, and some minor ones in Brazil. The key income generator to Indofood Agri is London Sumatra; its subsidiary's subsidiary.

Indofood Agri owns 73.5% of Salim Ivomas, which in turn owns 60% of London Sumatra.

Apart from the plantation and edible oil business which from Salim Ivomas which are consolidated into Indofood Agri, Indofood Agri also owns some plantations in Brazil.

Apart from the plantation business from London Sumatra which are consolidated into Salim Ivomas, Salim Ivomas is a producer of the Bimoli edible oils. It buys 50% of London Sumatra's oil palm as its input. The Bimoli edible oils, however, are not very profitable. Over the past 8 years, only a small fraction of Salim Ivomas' profits come from its edible oils business.

Salim Ivomas Segment Operating Profit (in billion IDR)
               edible oils           total
FY17:           92                 1,811
FY16:          234                1,958
FY15:          198                1,635
FY14:           95                 2,601
FY13:          232                1,586
FY12:          419                2,602
FY11:          186                3,242
FY10:          15                 2,537

Since so little of the profits are coming from edible oils, it means the rest of it must come from the plantations. Majority of Salim Ivomas' plantations results are consolidated results of London Sumatra. To demonstrate how important London Sumatra is to the shareholders of Salim Ivomas, and Indofood Agri, we only have to trace the flow of dividends from the source -- London Sumatra.

Between FY10-FY17, London Sumatra paid IDR 3,000 billion of dividends to shareholders.
Since Salim Ivomas owns 60% of London Sumatra, the dividends paid to Salim Ivomas is IDR 1,800 billion.

Between FY10-FY17, Salim Ivomas paid IDR 1,314 billion of dividends to shareholders, or 73% of what it received from subsidiary London Sumatra. Since Indofood Agri owns 73.5% of London Sumatra, the dividends paid to Indofood Agri is IDR 966 billion.

Between FY10-FY17, Indofood Agri paid IDR 418 billion of dividends to shareholders, or 43% of what it received from subsidiary Salim Ivomas, or 23% of what London Sumatra paid to its Salim Ivomas.

An investor interested in palm oil plantations (and its dividends) may do better by directly owning shares of London Sumatra. Unlike its parent Salim Ivomas, and 'grandparent' Indofood Agri, it has no debts and plenty of free cash flow. Though at current market price of IDR 8 trillion (about s$800m), it is not cheap.

Indofood Agri's 44% effective stake in London Sumatra will then be valued at $352m, which is lower than Indofood Agri's current price of $270m. This does not include Salim Ivomas' edible oils business, and the other JVs and Associates of Indofood Agri. Could there be some value here?

Since only 23% of what London Sumatra pays its parent eventually reach Indofood Agri shareholders, unless Salim Ivomas and Indofood Agri lower their capex spending, it is unlikely that there will be any huge dividend increases for shareholders of Indofood Agri. And since there are also huge debts held by both Salim Ivomas (IDR 9.5 trillion) and Indofood Agri (1 trillion), it is even less likely for more of the dividends from the golden goose to flow through.

London Sumatra Annual Reports:

Salim Ivomas Annual Reports:

Offer Price. The consideration for each Offer Share will be S$0.28 in cash (the “Offer Price”).

the offer price represents a premium of approximately 21.5%, 26.3%, 29.0% and 23.1% over the volume-weighted average price ("VWAP") per share for the one (1)-month, three (3)-month, six (6)-month and 12-month periods up to and including 5 April 2019, being the last market day on which the shares were traded on the SGX-ST prior to the offer announcement date

but over the "wrong" term or P/B of 0.326, how much discount is it ?

[Image: 5JS.png]
This stock was IPO-ed at $2.80 on 12 July 2002.

By buying back at a tenth of IPO price, Salim successfully shorted his own stock over the past 17 years and stands to make some $600m ($2.80-$0.28 * 250m shares) if his CA/privatization is successful.


I will not be surprised if he lists it again at some later time, when the present EU issues around palm oil ban blows over.
Revision of Offer Price

CIMB announces that the Offeror is revising the Offer Price as follows:

For each Offer Share on an ex-FY2018 Dividend basis (i.e. after adjusting for the payment of the FY2018 Dividend by the Company to Shareholders): S$0.3275 in cash.

The Offeror does not intend to further revise the Final Offer Price.

Pursuant to the revision of the Offer Price and after adjusting for the payment of the FY2018 Dividend by the Company to Shareholders, the Offeror will pay all accepting Shareholders the Final Offer Price of S$0.3275 for each Offer Share upon settlement of acceptances of the Offer, subject to the Offer becoming unconditional in all respects in accordance with its terms.
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