Reported 2Q12 core net profit of RM306.9m, leading to 1H12 core profit of RM594.4m, which is 45.8% of our numbers and48% of concensus. We expect earnings to improve in 2H12 due to tariff revision for Wessex.

Further cut in dividend payout to 0.9375 sen.

Stronger margins from Singapore Seraya Power due to higher utilization of combined-cycle gas power plant.

The weakened RM against SG$ on yoy basis has further increased contribution from Seraya Power in 1H12.

Despite higher revenue,YTL Communication (YTLC) continued to report larger losses of RM102.1m in 2Q12against RM94.9m losses in 1Q11 due to continued high operating cost commitment during startup phase.

Further enlarged cash piles to RM8.7bn. We will not be surprised with a potential M&A exercise in the telco industry.

Maintain BUY with unchanged Target Price of RM2.23.

Source: HLB Research 24 Feb 2012