KUMPULAN FIMA BERHAD

3Q FY2012 Results Notes

9MFY12 results within expectation. Kumpulan Fima Bhd (KFIMA)'s 9M FY2012 results were within our expectations. Net profit of RM55.9m accounted for about 73% of our full year target while its revenue of RM363.5m clocked in at 73% of our estimates. The 9-month PBT up 2% to RM114.0m, on the back of an 11% increase in revenue. Profitability improved across all business segments (See Figure 2), with the exception of manufacturing division. Manufacturing division's revenue dipped 2% to RM147.7m for the 9-month period under review and PBT contribution fell 25% to RM41.0m from RM54.6m. The lower earnings contribution from manufacturing division were mainly due to less favourable sales mix and recognition of RM3.05m on the fair value of equity-settled share options. Revenue from plantation division increased by 10% YoY to RM87.0m, thanks to higher commodity prices.

Food business was doing good, with revenue jumped 42% to RM69.9m while PBT contribution increased by more than one fold on higher sales volume and selling price for canned mackerel as well as foreign exchange gain. Bulking business was doing well, with revenue contribution increased by 17% to RM46.4m. The increase was mainly due to higher throughput recorded for oleochemical, edible oil and industrial chemical products.

On a QoQ basis, performances were generally lower on cyclical changes and a recognition of fair value of ESOS of RM8.44m. PBT was 26% lower compared to RM37.0m in 2QFY12. EPS for the quarter was 5.6sen, down from 6.44 in 2QFY12.

BUY maintained Overall performance was acceptable, with plantation, bulking and food businesses showing supporting growths. But we are expecting lower revenue from manufacturing division performance as it is experiencing volume changes due to cyclical demand for certain products. We continue to like KFIMA for its strong balance sheet and diversified businesses. Valuation wise, it is trading at a single digit PE of 6.7x with a dividend yield of 3.0%. We are maintaining our fair value of RM2.25 on KFIMA, pegging it at an average PE of 7x. BUY.


Source:Jupiter Securities Research 29 February 2012