Period 2Q12
Actual vs. Expectations
At 50% of our FY12 full year estimate and 48% of the consensus, the 1H12 net profit of RM1.02b came in fairly within expectations.
Dividends A 8 sen net DPS was declared in 2Q12 and to be paid on 16 Oct. (ex-date: 25 Sep).
Key Results Highlights
The 2Q12 net profit contracted 16% QoQ to RM855m while revenue declined 11%. This was due to a lower sales volume by 12% on maintenance activities, resulting in lower plant utilisations. However, the quarter’s net profit was 8% higher YoY as revenue rose 16% due to an improved operational performance.
The sharp decline in the QoQ results were led by Olefins & Derivates (O&D), where its revenue and EBITDA dropped 15% and 25% to RM2.73b and RM863m respectively on lower ASP due to weak demand.
However, Fertilisers & Methanol (F&M) saw its revenue rose 6% to RM1.21b on a higher ASP supported by strong demands although EBITDA dropped slightly by 2% to RM488m.
Strong demand and higher ASP for F&M pushed PChem’s 2Q12 earnings higher YoY despite O&D being hit marginally by a lower ASP on weaker market condition.
As such, F&M’s revenue and EBITDA soared 27% and 39% from RM952m and RM352m respectively. O&D’s 2Q12 revenue rose 14% from RM2.41m while EBITDA dipped 7% from RM932m previously.
Outlook Petrochemicals prices are on the rise due to seasonal factors in the 2H, especially for O&D on restocking, and this should help support PChem’s 2H12 earnings.
Changes To Forecasts
No changes to our FY12-FY14 forecasts.
Rating MAINTAIN OUTPERFORM
Valuation We are retaining our price target of RM7.46/share, based on CY13 14.5x PER, which is its recent PER high in Oct. 2011 after normalising from the peak of 20x in Mar 2011.
Risks A weaker USD vs. MYR rate and a sudden drop in crude oil prices.
Source: Kenanga
No comments:
Post a Comment