Golden-Agri Resources (GAR) registered a 3.2% YoY rise in revenue to US$1.8b and a net loss of US$53.9m in 3Q18, compared to net profit of US$43.7m a year ago. This brought 9M18 net loss to US$81.1m vs. our full year forecast of US$22m net profit and the street’s forecast of US$75.8m net profit.

Reported underlying profit fell 52.1% to US$38m in the quarter. Results were dragged by US$45.8m of foreign exchange losses in 9M18, with the strengthening of the USD against the IDR, RMB and Indian rupee.

Looking ahead, the group expects the demand growth for crude palm oil to remain stable supported by global food and energy demand, particularly the increase in biodiesel consumption in Indonesia.

We maintain our HOLD rating and fair value estimate of S$0.24 on the stock.

Source: OCBC Research - 13 Nov 2018