Bumitama Agri Ltd (SGX: P8Z) is an organization that is included with palm oil. Its essential business exercises are developing oil palm trees, and in addition reaping and handling crisp palm natural product groups ("FFB") into palm oil and palm piece, which are sold to refineries in Indonesia. Its operation are situated in three regions in Indonesia, to be specific Central Kalimantan, West Kalimantan and Riau.
A week ago, the organization's shares were exchanging at around S$0.70, which is only 6% higher than a 52-week low of S$0.66. That provoked me to investigate its business.
Here are three things I found:
1. Development in manor estimate
Bumitama Agri has been developing the land range of its ranches over the previous decade and that's only the tip of the iceberg. In 2002, the organization's planted range was 5,186 hectares; this has developed to 164,177 hectares by 2015.
The outline beneath gives a pleasant diagram of Bumitama Agri's advance in working out its ranch measure:
A week ago, the organization's shares were exchanging at around S$0.70, which is only 6% higher than a 52-week low of S$0.66. That provoked me to investigate its business.
Here are three things I found:
1. Development in manor estimate
Bumitama Agri has been developing the land range of its ranches over the previous decade and that's only the tip of the iceberg. In 2002, the organization's planted range was 5,186 hectares; this has developed to 164,177 hectares by 2015.
The outline beneath gives a pleasant diagram of Bumitama Agri's advance in working out its ranch measure:
2. Age profile of trees
Starting 1 January 2015, the trees in Bumitama Agri's estate have a weighted normal age of 6.9 years. The organization expressed in its 2015 yearly report that such an age is "youthful and positive." It included:
"Oil palm trees have a normal life expectancy of 25 years, achieving development between 4-18 years and enrolling top generation period extending from 7-18 years old. The youthful age of our trees guarantees that the Group's development profile will stay solid in the coming years."
Around 49.5% of Bumitama Agri's trees were at pinnacle generation age starting 1 January 2015. These information demonstrate that Bumitama Agri has numerous more years of collecting left in its current manors.
3. Nearness of significant shareholders
Starting 15 March 2016, two shareholders – to be specific Wellpoint Pacific and IOI Corporation Bhd (KLSE: 1961.KL) – altogether possess 81.93% of Bumitama Agri's aggregate shares.
Wellpoint Pacific is connected to Lim Gunawan Hariyanto, the CEO of Bumitama Agri. Then, IOI Corp is a noteworthy palm oil manor player recorded in Malaysia and is controlled by Tan Sri Dato' Lee Shin Cheng.
Since both Wellpoint Pacific and IOI Corp claim the vast majority of Bumitama Agri's shares, the pair can control the budgetary and working approach of the organization. It could therefore be vital for minority shareholders of Bumitama Agri to comprehend the long haul methodologies and logic of the two vast shareholders.
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