Petra Foods reported a weak set of 3Q15 results. Revenue dropped 28.4% YoY to US$84.6m as sales continued to be dragged by weaker consumer sentiment in Indonesia and the depreciation of regional currencies against the USD. In constant currency terms, revenue would have declined by 16.5%. Operating profit was also about 81% lower at ~US$3.0m.

During the quarter, an exceptional charge of US$19.5m was recognized due to the settlement of the dispute with Barry Callebaut AG over the sale of its Cocoa Ingredients business to the latter in 2013. This resulted in a net loss of US$20.7m.

Excluding the one-off item, a net loss of US$1.2m would have been recorded (3Q14: US$10.5m). Pending more information from an analyst briefing later, we keep our SELL rating while our fair value estimate of S$2.74 is under review.

Source: OCBC Research - 13 Nov 2015