Golden Agri Resources (GAR) saw a 2.9% YoY fall in revenue to US$1.8b and a 80.1% drop in net profit to US$43.7m in 3Q17. However, excluding one-off items, underlying profit rose 3.0% to US$79.5m in 3Q17.

In 9M17, PATMI was 70.8% lower at US$103m, accounting for 70% of our full year estimates but only 58% of Bloomberg’s FY17F consensus; the significant drop was mainly because of the recognition of deferred tax income on revaluation of US$242m in the previous period. Underlying profit for 9M17 was 80.3% higher at US$217m.

An interim dividend of 0.693 S cents/share has been declared, representing 30% of GAR’s underlying profit.

Pending more details from an analyst briefing later, we maintain our HOLD rating but put our fair value estimate of S$0.35 under review.

Source: OCBC Research - 14 Nov 2017