Positioned for Resiliency Through Favorable Circumstances
Key Takeaways :
▪️ JPFA made a notable recovery in 1Q24, with a net profit of IDR664.8 bn (vs a net loss of IDR-7.5 bn in 4Q23 and IDR-249.9 bn in 1Q23), The higher-than-expected net profit was primarily supported by better margins in the animal feed and poultry-related segments.
▪️ The government has extended the relaxation of the reference price regulation for commodities such as eggs, corn and broiler meat. This regulation is positive for the poultry industry.
▪️ Our estimation of the blended cost per broiler will range between IDR19.8k-20.8k in FY24E. Meanwhile, the average broiler price in May-24 hovered at IDR21,052 (+0.7% YoY/+3.3% MoM). With this spread, we anticipate positive margins in 2Q24.
▪️ The corn price for farmers in May-24 was IDR 5,871/kg, down by -17.6% MoM. The WASDE projects global soybean production in FY24 to increase by +4.8% YoY to 271.3mn tons. With the anticipated moderation of raw materials, we project that feed margins will remain solid at 8%-9%, supporting our FY24E net profit growth projection of IDR1.9 tn (+99.9% YoY).
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