YTL Power’s (YTLP) 9MFY13 core earnings of MYR765.1m came in within expectations at 75.2% of our full year forecast. Disappointedly, no dividend was declared for the quarter. We make no changes to our earnings estimate at this juncture. In view of the lack of near term re-rating catalysts and with its Power Seraya operations likely to still face pricing pressure, we maintain our NEUTRAL call and FV of MYR1.50.

- Within expectations. YTLP registered 9MFY13 revenue of MYR11.9bn, up 1.9% y-o-y, driven by its Wessex Water operations and WiMAX division but partly offset by lower contribution from its Malaysia and Singapore power operations. EBITDA, however, ended 2.4% lower y-o-y at MYR2.3bn, with margins dipping by 80bps to 19.0%, dragged down by weaker profitability at its power division. All in, its 9MFY13 net profit shed 7.0% y-o-y to MYR765.1m, which was within our expectations. On a quarterly basis, 3QFY13 revenue was MYR3.7bn while core earnings were MYR256.2m. 3Q is seasonally its weakest quarter while its power operations in Singapore continue to face headwinds.

- Lack of dividend. To our disappointment, Management did not declare any interim dividend for the quarter. This marks its second consecutive quarter without any dividend distribution. 9MFY13 DPS stood at 0.9 sen, which pales in comparison to 9MFY12’s 3.8 sen. We believe Management could be conserving cash to accelerate its WiMAX rollout. Having said that, we do not discount the possibility of a bumper dividend in 4QFY13 and hence make no changes to our DPS estimates for now, which are 2.7 sen for FY13F, 3.3 sen for FY14F and 3.8 sen for FY15F.

- Maintain NEUTRAL. With the results largely in line, we make no changes to our earnings forecasts for now. Given the lack of any near term re-rating catalysts and with its Power Seraya operations likely to continue facing pricing pressure, we are maintaining our NEUTRAL call for now, with our FV unchanged at MYR1.50.

Source: RHB