Period 2Q12
Actual vs. Expectations
Stripping out the EI,
the 2Q12 core earnings of RM607.5m came in largely in line. This brought 1H12
core profit to RM1.28b, which accounted for 48% of our FY12 full-year estimate
and 47% of the market consensus.
Dividends A
3.5sen GDPS was announced in 2Q12, which is the same as last year.
Key highlights
The 2Q12 reported net
profit, which contracted by 23% QoQ (-21% YoY) to RM534.5m due mainly to the
RM174.3m one-off gain from the disposal of its entire 100% stake in Genting Oil
Natuna and Sanyen Oil & Gas recognised in 1Q12.
This round, it was
the pre-operating cost of West Zone, which hit
Genting Singapore’s (“GENS”, NOT RATED)
2Q12 earnings, where its 2Q12 adjusted EBITDA dipped 17% QoQ while revenue
dropped 9%. Nonetheless, the casino earnings were fairly flattish QoQ as the
decline in the business volume (-4% QoQ) was mitigated by an improved luck
factor (3.1% in 2Q12 for rolling chip wins from 3.4% previously).
Genting Malaysia Bhd
(“GENM”, OP; TP: RM4.18) reported a
broad base improvement in its results. The 2Q12 adjusted EBITDA for its Malaysian
casino rose 19% QoQ, nearly tripled for UK casinos while the USA unit posted an
adjusted EBITDA of RM60.6m from RM1.3m in 1Q12, all due to improved business
volumes.
Despite a higher
revenue by 7% QoQ, Genting Plantation Bhd (“GENP”, OP; TP: RM9.70) reported a
2Q12 adjusted EBITDA in plantation unit, which contracted by 5% QoQ due to a higher
proportion of third party’s CPO and palm kernel (which has lower margins)
processed. In 2Q12, its average selling price for CPO was RM3,206/mt vs.
RM3,179/mt in 1Q12 while the average selling price for palm kernel dipped 3% to
RM1,890/mt.
Power assets posted a
2Q12 adjusted EBITDA of RM141.6m, which rose 13% QoQ on the back of a 9% hike
in revenue. This was due mainly to a higher net generation by the Jangi power
plant.
Outlook The
pre-opening cost for West Zone is expected to be recognised further in 2H12.
However, GENS’ earnings will improve once the charge is fully recognised by
this year-end.
GENM should enjoy
higher earnings on resilient RWG earnings, a turnaround in the UK casinos and a
full year earnings impact from RWNYC.
GENP’s earnings are
unlikely to repeat its FY11 supernormal profits due to lower FFB production and
lower CPO prices.
Source: Kenanga
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