Above estimates. NTPM's full-year revenue came in at RM449.8m, which grew by 7% y-o-y mainly due to improvement in sales for  personal care products (+28.6% y-o-y) and paper products (+2.6% y-o-y). Stronger performance from the personal care product segment was driven by encouraging sales volume of baby diapers, while the better showing from the paper product segment was propelled by higher sales of tissue products in the domestic market. However, PBT declined by 11.3% y-o-y to RM59.5m, no thanks to: i) higher raw material prices, ii) increase in staff and utility costs, and iii) higher interest expense (+45.5%). On a q-o-q basis, revenue and earnings were lower by 0.6% and 18.1% y-o-y on the back of weaker topline and higher sales charges/advertisement expenses. EBIT margin continued to erode from 16.5% to 13.9% y-o-y as costlier raw materials and higher overhead cost bit into its margin.

No final dividend. The board of directors is not recommending any final dividend payment for this financial year. Thus, the FY12 total net dividend per share stood at a low 1.45 sen vs 2.9 sen in FY11, which translates into a net payout of 36.4% vs 62.6% for FY11.

Maintain NEUTRAL. We reckon NTPM's continuous efforts in boosting sales and improving its product quality will underpin its earnings going forward. Nonetheless, the lower-than-expected dividend might affect sentiment on the stock in the short term. Maintain NEUTRAL with its FV unchanged at RM0.55 based on 13x FY13 EPS.

Source: OSK