UBS Astra Agro Lestari (AALI Buy PT 34,000): Q110 slight disappointment

AALI Q110 net income amounted to Rp272 bn (+25% YoY). Despite Rp19 bn forex loss in Q110 (vs. Rp30 bn forex gain in Q109), AALI’s pre-tax profit grew 21% YoY to Rp403 bn.
During the period, AALI CPO sales volume totaled 223,308 tons (-1.2% YoY), while the average CPO selling price stood at Rp6,554 per kg (+19% YoY). AALI’s Q110 revenue stood at Rp1.63 tn (+16% YoY).
Sales comment: It is not that bad. AALI’s Q110 numbers might be looking challenging relative to the full year projection – Q110 net profit accounts for only 9% of UBSe 2010; but the slack will be filled up in the subsequent quarters. CPO production highly correlates with the wet season (September-March), but with heavy rain level even in April – flooding in Jambi and Kalimantan – CPO production might even surprise in Q210.