Petra Foods’ 2Q14 reported results for continuing operations continued to be distorted by the weaker regional currencies against USD on a YoY basis. Reported 2Q14 revenue increased 5.3% YoY to US$131.8m while reported PATMI declined 10.6% to US$13.2m. However, in constant currency terms, growth is strong as 2Q14 revenue and PATMI increased by 20.9% and 10.4% respectively. The revenue growth is led by key emerging markets Indonesia (24.8% increase) and Philippines (>40% increase).

On a half-year basis, reported 1H14 revenue increased 1.0% YoY to US$254.6m, forming 45.5% of our FY14 forecast. Reported PATMI declined 6.2% to US$27.1m, making up only 41.3% of our forecast due to lower-thanexpected EBIT margin. An interim cash dividend of 2.73 S-cents was declared. Pending an analyst briefing later, we put our Buy call and fair value estimate of S$4.06 under review.

Source: OCBC Research - 14 Aug 2014