Fima’s 9MFY18 core net income below expectation

KUALA LUMPUR: Fima Corporation Bhd’s (Fima) first nine months of financial year 2018 (9MFY18) core net income has come in below expectations but analyts believe that the group’s earnings growth should resume from FY19 onwards.

As per Fima’s filing on Bursa Malaysia, the group’s profit net of tax for the 9M cumulative current year to date ended December 31, 2017 amounted to RM35.2 million, down from RM49.5 million the preceding year corresponding period.

Fima’s 9MFY18 Core Net Income of RM32.2 million was below the research arm of MIDF Amanah Investment Bank Bhd’s (MIDF Research) expectation as it made up 57 per cent of its full year earnings estimate.

“As expected, no dividend is announced in the third quarter of the financial year,” MIDF Research said.

On a separate note, the research arm was positive on Fima’s announcement that the group has completed the acquisition of Java Plantations which holds 80 per cent stake in a 1331 hecatres (ha) of leasehold plantation land in Jeli, Kelantan.

“We are long term positive on the news as Fima total planted landbank will be increased by 18 per cent and it is earnings accretive from FY20 onwards.

“There is synergy to be realised as this landbank is located near Fima existing plantation estates in Gua Musang and Kuala Krai, Kelantan.”

However, MIDF Research revised its revenue and earnings assumption downwards for Fima’s ‘production of security and confidential documents’ PSCD division.