Well within expectations. FMH's FY12 revenue and core earnings of RM327m and RM21m were spot on, representing 100% and 105% of both our and consensus' FY12 forecasts. Earnings ticked up by only 6% due to a one-off tax rebate of RM1.5m booked in FY11. Stripping off the tax rebate, the company's core earnings grew a healthy 14%. All in, we are happy with the group's results, which saw strong revenue and PBT growth of 11% and 17% respectively despite the weak global economic sentiment.

In the pink of health. Save for its loss-making rail freight segment, which contributed only 1% of the group's total gross profit, FMH's other segments were in the pink of health. Management has also hinted that it may terminate the rail freight business in the event MMC Corp (TRADING BUY, FV RM3.70) privatizes KTMB. Revenue in Its core sea freight business grew 6% y-o-y and 15% q-o-q, mainly attributed to its strong Full Container Load (FCL) operations, which saw a 20% y-o-y jump in Total Equivalent Units to 55k. Meanwhile, its gross margins from the sea freight segment improved 200bps, thanks to low freight rates. The second biggest gross profit contributor was the contract logistics segment, whose revenue and profit climbed 47% and 43% y-o-y, buoyed by the contracts secured in early FY12 from Shell.

We continue to like the group's contract logistics business as it has just secured a contract from a pharmaceutical giant to provide in-bound logistics services. While earnings contribution from this new contract secured is still minimal at this stage, we believe it will provide FMH with a good reference and marketing advantage in capturing even more contract logistic deals going forward. In the meantime, the group's land freight segment also performed immensely well, with revenue soaring 70% y-o-y and 18% q-o-q due to a strong pick-up in freight activities in Thailand after the flood situation improved. Volume (TEU) from this segment ballooned by a stellar 70% y-o-y to 4.2k TEUs.