PETALING JAYA: Genting Plantations Bhd is expected to post stronger earnings in the fourth quarter of financial year 2020 (FY20) due to a recovery in fresh fruit bunches (FFB) yields at its estates in Indonesia and higher average crude palm oil (CPO) prices.
However, the earnings could be partially offset by the group’s weaker property and joint-venture earnings, said CGS-CIMB Research in a report.
The research unit is also reiterating an “add” for Genting Plantation’s exposure to the rising CPO prices with a higher target price at RM10.90.
The planter also expected production from its Indonesian estates to peak in the fourth quarter of FY20.
“We expect the combination of higher quarter-on-quarter production and prices to lift the group’s fourth-quarter earnings, ” added the research unit.
Genting Plantations pointed out that its estates in Indonesia would likely return to their growth trajectory in 2021 due to the young age profile of their palm trees.
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