Golden Agri

Golden Agri - 29th June 2016

Golden Agri-Resources delivers strong results in the first quarter of 2016 despite lower CPO prices and plantation output .

Plantation business impacted by the severe El Niño weather condition in 2015 and softer average CPO market prices • Integrated business model delivers resilient results as palm and lauric segment posts substantial growth of EBITDA1 Singapore, 13 May 2016 – For the first quarter of 2016, Golden Agri-Resources Ltd and its subsidiaries (“GAR” or the “Company”) recorded revenue of almost US$1.5 billion. GAR reached stronger EBITDA1 and core net profit2 at US$142 million and US$40 million respectively. The palm and lauric business mainly contributed to the increase, which was partly offset by lower results from the plantation and palm oil mills business.

 The performance of our plantation business was in line with the industry’s declining palm product output and softer average crude palm oil (“CPO”) market prices. EBITDA1 reached US$76 million in the first three months of 2016, 24 percent lower than that achieved in the same period last year. Pg 2 of 3 The palm and lauric business continued its improvement since last year as the integration of downstream assets progresses. The performance was further enhanced by CPO market price uptrend over the quarter. As a result, first quarter 2016 EBITDA1 almost tripled over the previous year to US$62 million, while the EBITDA1 margin increased to 4.9 percent from 1.6 percent last year. Our oilseeds and others segments maintained their positive contribution with total EBITDA1 growing to US$4.7 million in the first quarter of 2016 from US$4.3 million in the same period last year. The oilseeds business environment in China remained favourable. Starting this year we have adopted the new accounting standards for our plantation assets, which impacted our financial statements. However GAR’s financial position remains sound with adjusted net gearing ratio5 of 0.49 times and total consolidated assets of US$8.0 billion as at 31 March 2016.

NAV of US$0.30 .
EPS about 1.3 cents
dividend of about 0.65 cent

Golden Agri after hitting the high of 44 cents on 23rd Mar 2016 it had since drifted lower to touch 32.5 cents on 28th June 2016. This is rather bearish.

The current price of 33.5 cents is trading near the support level at 33 cents.

Looks like we may see a technical rebound soon as the current price has been driven into oversold territories. Macd is also pointing to an oversold situation.

Short term wise looks like it may move up to test 38 cents. Crossing over of 38 cents with good volume that may 39.5 cents then 41.5 cents.

(trade base on your own decision)