Bumitama Agri (BAL SP) Stock Analysis: Q1 2025 Results, Dividend Yield & BUY Rating

Maybank Research Pte Ltd

May 16, 2025

Bumitama Agri (BAL SP): BUY Recommendation Maintained Despite Export Levy Adjustments

Investment Thesis: Attractive Dividend Yields and Earnings Potential

Bumitama Agri (BAL SP) is maintaining a BUY rating, supported by attractive net dividend yields exceeding 6%. Despite facing seasonally low output and high manuring costs in 1Q25, the company’s results were within expectations. Earnings are projected to improve in the second half of 2025, driven by increased output and reduced unit costs, particularly in Q4. The target price (TP) has been slightly adjusted to SGD0.83 from SGD0.86, based on an unchanged 8x FY25 PER, aligning with its 6-year mean. The single-digit PER and high dividend yields continue to make BAL an appealing investment. [[1]]

1Q25 Performance: Strong ASPs Drive YoY Earnings

BAL’s 1Q25 core PATMI reached IDR530 billion, marking a 42% YoY increase but a 39% QoQ decrease. This performance aligns with 23% of both Maybank’s and consensus FY25E forecasts, meeting expectations. The YoY growth was fueled by higher revenue, attributed to stronger CPO ASP (+26% YoY, +5% QoQ) and PK ASP (+94% YoY, +16% QoQ), which compensated for lower sales volumes. An inventory build-up in 1Q25 somewhat dampened revenue and profit figures. Favorable weather conditions allowed BAL to complete a significant portion (35%-45%) of its full-year fertilizer plan in 1Q25, compared to 25% in 1Q24, leading to increased manuring costs YoY. [[1]]

FY25E Production Targets: Focus on Internal FFB Growth

In 1Q25, FFB nucleus production totaled 508,048t (+2% YoY, -24% QoQ), representing 22% of the full-year forecast, consistent with historical trends. BAL is committed to achieving up to 5% YoY FFB growth for FY25E, with monthly output expected to peak in September/October 2025. As of the report date, BAL has minimal forward sales commitments for the remainder of FY25E. [[1-2]]

Impact of Higher Export Levy on Net CPO ASP

The Indonesian government’s decision to increase export levies for CPO from 7.5% to 10%, effective May 17, will likely reduce the net CPO ASP in the domestic market. Consequently, Maybank has revised FY25E-27E EPS forecasts downward by -3%/-5%/-5% to account for these new export levies. BAL has also updated its dividend policy, now targeting a distribution range of 40% to 60% of distributable income, up from the previous cap of 40%. Despite this change, Maybank is maintaining a conservative 50% DPR forecast for FY25E-27E. [[2]]

Revised Price Target and Stock Statistics

• Current Share Price: SGD 0.77
• 12-Month Price Target: SGD 0.83 (+15%)
• Previous Price Target: SGD 0.86
• Rating: BUY

Company Description

Bumitama Agri Ltd. is an investment holding company involved in operating oil palm plantations and mills in Indonesia. [[3]]

Key Statistics

• 52-week High/Low (SGD): 0.92/0.66
• 3-month Average Turnover (USDm): 0.4
• Free Float (%): 100.0
• Issued Shares (m): 1,758
• Market Capitalization: SGD1.3B (USD1.0B)

Major Shareholders

• Fortune Corp. Ltd. /SG/: 52.3%
• IOI Corp: 32.0%

Price Performance

The stock’s absolute performance shows (5)%, (8)%, and 16% changes over -1M, -3M, and -12M periods, respectively. Relative to the index, the performance is (11)%, (8)%, and (2)% for the same periods. [[3]]

Financial Highlights and Forecasts (IDR b)

BAL’s Results Summary

Operational Data

Sales Data

[[2]]

Risk Factors

Several risk factors could impact earnings estimates, price target, and rating for Bumitama Agri (BAL): [[3]]

• Weather anomalies affecting output growth.
• Lower-than-expected CPO prices.
• Negative policies from import countries.
• Unfavorable policies from the Indonesian government.
• Sharp declines in crude oil prices impacting palm biodiesel demand.
• Weaker competing oil prices (soybean and rapeseed).

Key Financial Metrics

Income Statement (IDR b)

Balance Sheet (IDR b)

Cash Flow (IDR b)

Key Ratios

[[5]]