Journey to Wealth
Bintulu Port Holdings - 2Q12 meets expectations
Period 2Q12/1H12
Actual vs. Expectations The 2Q12 net profit of RM39m brought the 1H12 net profit to RM82.7m.
The 6M12 net profit was largely within expectations, accounting for 55% and 48% of ours (RM149.2m) and the consensus' (RM171.7m) full year net profit.
The slight variance to our estimate was due to a tax credit of RM12m recognised in the quarter. Excluding the tax credit, the 1H12 net profit will be RM70.7m (around 47% of our full year estimate).
Dividends As expected, a second interim DPS of 7.5 sen was declared in 2QFY12.
Key Results Highlights YoY, 2Q12 net profit was up 24.8% mainly due to the tax credit above recognised in the quarter. Excluding the tax credit, the net profit will be down by 14% mainly due to higher administrative and finance costs.
QoQ, the net profit was down 10.9% mainly due tolower revenue recorded in the quarter. This waswithin expectations as BIPORT's second quarter is seasonally lower than the other quarters of the year.
Outlook Catalysts for BIPORT's earnings are (i) higher tariff for cargo handling when the Samalaju Industrial Port kick-starts (expected initial phases by 2H13) and (ii) higher LNG vessel calls and port's services when the ninth LNG train for MLNG is completed by 2016.
Change to Forecasts Maintaining our earnings estimates with 1H12 results on track to meet our full year numbers.
Rating MAINTAIN MARKET PERFORM
Valuation Our Target Price of RM7.20 is based on a DCF valuation (WACC: 9.6%).
Risks (i) Lower than expected port and bulking division activity and (ii) Higher than expected CAPEX for the Samalaju port, which could eat into the BIPORT's cashflows.
Source: Kenanga
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