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Genting Plantations Bhd - FY12 within expectations

kiasutrader
Publish date: Thu, 28 Feb 2013, 10:18 AM
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Period  4Q12 / FY12

Actual vs. Expectations  GENP FY12 core net profit* of RM329m is within expectations. It made up 100% of the consensus estimate of RM330m and 105% of ours of RM313m.

 Although the CPO price declined substantially in 4Q12, the exceptionally high FFB volume in 4Q12 has supported its earnings. Note that Sabah estates FFB yield has recovered slightly later in 4Q12 (against 3Q12 for other states).

Dividends  As expected, a final dividend of 5.50 sen was recommended together with a special dividend of 2.75 sen. Combined with previous interim dividend of 4.25 sen, the total gross dividend for FY12 came up to 12.50 sen (net: 9.38 sen).

Key Results Highlights YoY, the FY12 core net profit declined 25% to RM329m as CPO prices fell 14% to an average RM2784/mt. Better earnings from its property division (EBIT rose 73% to RM40m) mitigated the group earnings decline, but its contribution was still small.

 QoQ, the 4Q12 core net profit declined 6% to RM89m as the average CPO price tumbled 22% to RM2219/mt. Better earnings from property division (EBIT rose 184% to RM18m) again mitigated the group earnings decline here.

Outlook  The current low CPO prices should keep the share price upside limited.

Change to Forecasts Maintaining our FY13E-FY14E earnings of RM319m-RM378m. Our key assumptions are FY13E-FY14E CPO average prices of RM2500-RM2700 per mt.

Rating   Maintain UNDERPERFORM

 We believe the worst is not yet over for GENP as its FY13E should still stay low (-3% YoY to RM319m).

Valuation  Maintaining our TP of RM7.60 based on an unchanged Fwd. PER of 17.6x to its CY13E EPS of 43.1 sen.

Risks  Better than expected CPO prices.

Source: Kenanga
GENP (2291)
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