In Indonesia, RHB estimates 4Q FFB output also fell by about 14% q-o-q, based on the trend in the previous quarter. However, CPO prices net of taxes rose 11.6% q-o-q due to the impact of the levy-free period until mid-November 2022, which could translate to flattish q-o-q earnings.
RHB Group Research analysts Hoe Lee Leng and Syahril Hanafiah have maintained their “neutral” rating on the plantation sector, expecting earnings in 4QFY2022 to be in-line for most players based on its production output estimates.
In their Jan 31 report, the analysts expect 4QFY2022 earnings to drop q-o-q for Malaysian planters and be flattish for Indonesian players. In Malaysia, the fresh fruit bunches (FFB) output for the companies in its coverage fell by an average of 0.5% q-o-q in 4QFY2022, while spot crude palm oil (CPO) prices decreased by 1% q-o-q. This could translate to slightly lower q-o-q earnings.
