Golden Agri-Resources (GAR) reported a 10.0% YoY fall in revenue to US$1.9b and a net loss of US$29.0m in 4Q17, impacted by exceptional items worth about US$45.6m (impairment loss on PPE and disposals). Excluding other one-off items such as changes in fair value of biological assets and forex effects, underlying profit was US$37.3m in the quarter.

Full year net profit was US$74.0m while reported underlying profit was US$253.8m. We were forecasting full year earnings of US$146m while the street was estimating US$172m, based on Bloomberg consensus.

The group has proposed a final dividend of 0.116 S cents, bringing full year dividend to 0.809 S cents, representing a payout ratio 30% to underlying profit, in line with the group’s dividend policy.

Pending an analyst briefing, we maintain our HOLD rating but put our fair value estimate of S$0.37 under review.

Source: OCBC Research - 27 Feb 2018