Petra Foods’ 1Q15 revenue was down 13.5% YoY to US$106.2m and formed 20% of our FY15 forecast. PATMI stood at US$7.7m, which was 42.8% lower YoY and only constituted about 13-14% of our and the street’s FY15 projections. In constant currency terms, both revenue and PATMI also saw a YoY decline of 9.3% and 39.1% respectively.

With lower than expected economic growth for the group’s key market Indonesia, the weaker conditions drove trade customers to reduce inventory levels and in turn negatively impacted the group’s sales. As IDR continued to depreciate against the USD, higher costs of raw and packaging materials took a toll on performance as well.

Pending more information from an analyst briefing later, we keep our HOLD rating while our fair value estimate of S$3.78 is under review.

Source: OCBC Research - 7 May 2015