Period 1Q13
Actual vs. Expectations
The 1Q13 net profit
of RM19.0m made up 19% and 18% each of the consensus’ FY13 earnings of RM97.5m
and our earnings forecast of RM107.3m.
We deem this to be
broadly in line with expectations as 1Q FFB volume is typically lower due to
the seasonal factor.
Recall that in FY11,
1Q11 net profit made up only 20% of the full year earnings.
Dividends As
expected, no dividend was announced.
Key Results Highlights
YoY, 1Q13 net profit
declined 34% to RM19m due to lower CPO prices (-6% YoY), palm kernel prices
(-26% YoY) and FFB production (-11% YoY to 71,536mt). FFB production cost has
also increased by 27% YoY mainly due to higher fertiliser costs.
QoQ, 1Q13 net profit
improved 54% as FFB sales volume improved significantly by 41% to
71,536mt.
Outlook UMCCA’s fundamentals remain healthy with a strong
FY13-14E FFB growth rate of 19%-3%.
Its long-term outlook
remains positive as we believe that UMCCA can sustain a 3-year FFB CAGR growth
of 8% as its Sabah estates mature.
Change to Forecasts
Our FY13-14E earnings
forecasts of RM107mRM109m remain unchanged.
Our key assumptions
are CY12-13E CPO prices of RM3150-RM3100. Adjusted to sync with UMCCA’s financial
year period, its FY13-14E CPO average selling prices (ASP) are assumed at
RM3125-RM3100. We have also assumed FY13-14E FFB productions of 337k-349k.
Rating Maintain OUTPERFORM
UMCCA’s net dividend
yield of 4.2% is the highest among planters under our coverage.
Its average trees’
age profile of 7.6 years old means its strong FFB growth can be sustained.
Valuation Maintaining
our TP of RM8.05 based on FY13E PER of 15.3x (+1SD@5-year mean, implying a premium
to its peers which only command a +0.5SD for its double digit FFB growth and
its above-peer dividend payout of ~60%).
Risks A
sustained drop in CPO prices.
Source: Kenanga
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