Earnings Report /
Thailand

Thai Vegetable Oil PCL: Core number undershot our model; YoY weaker 4Q21 profit expected

  • Missed expectations

  • TVO posted a 3Q21 net profit of Bt360m

  • We model a Bt305m 4Q21 core profit, down 35% YoY

Prasit Sujiravorakul
Prasit Sujiravorakul

Equity Research Analyst

Bualuang Securities
15 November 2021

Our HOLD rating stands based on a decent 6% dividend yield amid lower SB price from more balanced SB supply and demand in 2022.   

Missed expectations

TVO posted a 3Q21 net profit of Bt360m, up 1% YoY but down 50% QoQ. Excluding extra items in 3Q21—Bt109m FX gain, Bt15m in reversal of inventory impairment expense and Bt7m in reversal of financial asset impairment—core profit was Bt228m, down 39% YoY and 69% QoQ. Net profit missed our estimate by 5% while core profit undershot our estimate by 43% due to a significantly lower GM than modeled. GM was only 5.5% in 3Q21 (the lowest since 2Q13) and well below our 10.5% estimate (10.4% in 3Q20 and 14.2% in 2Q21).