FFB growth to moderate in 2H18 after it grew 20.7% y-o-y in 1H18. As weather is relatively normal at most of its estates, it is now guiding for a FFB output growth of 15% for FY18 (from 10-15% previously).
In terms of seasonality of production, it expects 1H/2H output to be at a 45%/55% ratio. We leave our FFB growth forecast intact, at a more conservative 13.4%, for FY18. We estimate unit costs dropped 6% y-o-y in 1H18, on the back of a lower fertiliser application of 50% of total (versus normal levels of 55-60%).
Management expects CPO unit costs to be relatively stable, at USD200- 220/tonne in FY18, in line with that of FY17.
Source: RHB Invest Research - 15 Aug 2018
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