Noble Group: Cost of Capital and Deforestation Risks Under Priced? (Revised)

Download Report Here (PDF) Summary Forecast of 2016 revenue is $46 billion, 30% below 2015, due to poor semi-annual performance and asset sell down strategy. 33% of Noble’s palm oil landbank is undevelopable as it is primary forest and possibly peat. Impairments of palm oil assets and coal receivables may reduce balance sheet equity value …

Economic Drivers of Deforestation: Sectors exposed to sustainability and financial risks

Download Report Here (PDF) Summary Deforestation risks material to financial institutions. Key economic sectors exposed to deforestation-related financial risks. Agriculture, mining, oil and gas, and infrastructure sectors impacted. The economic links between deforestation and climate change are increasingly recognized in, for example, the 2015 Framework Convention on Climate Change’s Paris Agreement and elsewhere. This recognition …

IOI Corporation: Customers and Investors Want Sustainability

Download Report Here (PDF) Summary IOI stated in June 2016 it would implement RSPO Next certification by Q4 2016. Meanwhile, IOI needs to resolve its pending RSPO complaints. 26 customers suspended contracts because of IOI’s RSPO noncompliance. IOI’s RSPO suspension may drag on, further suppressing IOI’s equity value. In response to IOI’s share price collapse …

Palm Oil Revenue at Risk

Download Report Here (PDF) Summary Austindo Nusantara Jaya (ANJT:IJ): 2016 35% quarterly revenue at risk based on Q4 2015 actual revenue losses of 10% when ANJT did not meet buyers’ NDPE policy expectations. Sawit Sumbermas Sarana (SSMS:IJ): 2016 42% quarterly revenue at risk based on Q4 2015 actual revenue losses of 0% to 5% when …

Felda Global Ventures: RSPO Credentials at Risk, Immediate Cash Flow Impacts

Download Report Here (PDF) Summary Resolve issues pertinent to FGV’s 22% contested land bank so that FGV can sell firm-wide “higher-margin” CSPO into a growing global market. Manage FGV’s plantation assets in accordance to RSPO policies to avoid future suspension and cash-flow-at-risk. Grow firm value through value-added CSPO product development rather than “buying earnings” through financially …

Possible IOI RSPO Suspension

Download Report Here (PDF) Key Findings RSPO Complaint Panel ruling on non-compliance expected soon RSPO’s formal rules require that IOI be suspended from selling CSPO if grievance is upheld in the Panel’s final ruling Several other buyers may suspend IOI independent from RSPO ruling Any form of suspension would trigger further CSPO contract revaluation Overview …

Fires Burn Southeast Asian Assets

Indonesian Government Growth Down, Corporates’ Earnings Uncertain Across Indonesia, an area half the size of Switzerland burned in less than four months this year, with investors’ capital going up in smoke. From July 1st to October 20th, 2015, 97,000 fires were detected in Indonesia, and over two million hectares of forest caught fire, one-third of …

Sustainability and Legal Issues Pose Serious Financial Risk for Palm Oil Producer SSMS

Sawit Sumbermas Sarana (SSMS), a large Indonesia palm oil producer, is exposed to significant financial risk due to sustainability and legal compliance issues that could prevent its plans for rapid growth, according to a new analysis released today by Chain Reaction Research (CRR).

IDX-Listed Palm Oil Producers Face Serious Business Risks Without Improved Sustainability Practices

Six of the ten largest palm oil producers traded on the Indonesian Stock Exchange (IDX) face high financial risk exposure from major traders committing to eliminate forest and peatland destruction and human rights abuses from their supply chain, according to a new analysis released today by Chain Reaction Research. The report assesses the financial risk …

Palm Oil Producer KLK’s Profitable Business Model at Serious Risk

Kuala Lumpur Kepong (KLK) is a large Malaysian palm oil company. It manages more than 200,000 hectares of palm oil plantations in Indonesia, Malaysia and Liberia, and is active in the manufacturing of oleochemicals in Malaysia, China and Europe. The company is active across the total palm oil value chain, but the revenue from its …