Journey to Wealth
Petronas Chemicals Group - No surprises in 2Q12 results
Period 2Q12
Actual vs. Expectations
At 50% of our FY12 full year estimate and 48% of the consensus, the 1H12 net profit of RM1.02b came in fairly within expectations.
Dividends A 8 sen net DPS was declared in 2Q12 and to be paid on 16 Oct. (ex-date: 25 Sep).
Key Results Highlights
The 2Q12 net profit contracted 16% QoQ to RM855m while revenue declined 11%. This was due to a lower sales volume by 12% on maintenance activities, resulting in lower plant utilisations. However, the quarter's net profit was 8% higher YoY as revenue rose 16% due to an improved operational performance.
The sharp decline in the QoQ results were led by Olefins & Derivates (O&D), where its revenue and EBITDA dropped 15% and 25% to RM2.73b and RM863m respectively on lower ASP due to weak demand.
However, Fertilisers & Methanol (F&M) saw its revenue rose 6% to RM1.21b on a higher ASP supported by strong demands although EBITDA dropped slightly by 2% to RM488m.
Strong demand and higher ASP for F&M pushed PChem's 2Q12 earnings higher YoY despite O&D being hit marginally by a lower ASP on weaker market condition.
As such, F&M's revenue and EBITDA soared 27% and 39% from RM952m and RM352m respectively. O&D's 2Q12 revenue rose 14% from RM2.41m while EBITDA dipped 7% from RM932m previously.
Outlook Petrochemicals prices are on the rise due to seasonal factors in the 2H, especially for O&D on restocking, and this should help support PChem's 2H12 earnings.
Changes To Forecasts
No changes to our FY12-FY14 forecasts.
Rating MAINTAIN OUTPERFORM
Valuation We are retaining our price target of RM7.46/share, based on CY13 14.5x PER, which is its recent PER high in Oct. 2011 after normalising from the peak of 20x in Mar 2011.
Risks A weaker USD vs. MYR rate and a sudden drop in crude oil prices.
Source: Kenanga
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
Market Buzz
2024-11-24
PCHEM2024-11-23
PCHEM2024-11-22
PCHEM2024-11-22
PCHEM2024-11-22
PCHEM2024-11-21
PCHEM2024-11-21
PCHEM2024-11-21
PCHEM2024-11-21
PCHEM2024-11-21
PCHEM2024-11-21
PCHEM
2024-11-21
PCHEM2024-11-21
PCHEM2024-11-21
PCHEM2024-11-20
PCHEM2024-11-18
PCHEM2024-11-15
PCHEM2024-11-14
PCHEM2024-11-13
PCHEMMore articles on Journey to Wealth
Ekovest: No plan to launch another offer for Iskandar Waterfront City
Created by kiasutrader | Mar 29, 2018
Kenanga Research - On our Portfolio - Parliament dissolution around the corner?
Created by kiasutrader | Mar 25, 2013
Plantation Sector - Proposed accounting standard scrapped OVERWEIGHT
Created by kiasutrader | Mar 25, 2013
Pavilion Reit - Limited upside, earnings upside have been priced in HOLD
Created by kiasutrader | Mar 25, 2013
Discussions
Be the first to like this. Showing 0 of 0 comments
Post a Comment
Featured Posts
Latest Videos
Apps
Top Articles
1
save malaysia!
Visa-free travel to China extended for Malaysians to 30 days
2
3
Koon Yew Yin's Blog
CPO price is rising rapidly as shown by chart below - Koon Yew Yin
4
Axcapital's investment blog
KAB - Executing its way to a record quarter. Could more Petronas contracts be coming?
6
7
8
BFM Podcast
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
