analysts are predicting that QL resources may continue to fight for board representation in the poultry company.
KUALA LUMPUR: Maybank Investment Bank expects QL Resources Bhd
’s financial year ending March 31, 2017 (FY17) growth to be supported by its marine division (MPM) on new capacity expansion.
It added that a weaker ringgit would also help the poultry company to support its export sales (>50% of MPM sales) while its livestock division could gradually improve as egg prices normalise.
“Imputing the weaker set of results, we revised our forecasts downwards by 7%/6% for FY17/18. Maintain ‘hold’ but with a lower DCF- target price of RM4.15 (-5sen; 7.8% WACC and 2% long term growth),” Maybank said.
QL’s fourth quarter to March 31 core net profit of RM38mil took FY16 core net profit to RM192mil. This accounted for 94% and 91% of Maybank and consensus full-year forecasts respectively.
“The shortfall was mainly due to weaker-than-expected egg prices and higher egg farming costs. The livestock division’s (ILF) FY16 pretax profit fell 29% year-on-year, while pretax margins contracted 2.1 percentage points,” it said.
FY16 palm oil (POA) revenue declined 10% on lower crude palm oil price and lower fresh fruit bunch processed by its Sabah palm oil unit. Pretax profit fell 18% for similar reasons as well as lower contribution from its associate, Boilermech.
In FY16, the MPM posted 29% pretax profit jump mainly on the positive impact of a weaker ringgit (>50% export sales) and better fish catch due to the El Nino weather.
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