- Kuala Lumpur Kepong Bhd (KLK) remains a BUY, with a lower
fair value of RM23.40/share (versus RM25.90/share previously). We like KLK for
its young oil palm trees and efficient plantation operations.
- KLK’s FY12 core net profit was slightly below our forecast
due to weak manufacturing earnings in 4QFY12. If consensus estimates had
included the gain on disposal of the retailing unit, then KLK’s results were
within market expectations.
- The group has declared a final gross DPS of 50 sen, which brings
total gross DPS to 65 sen for FY12. This translates into a yield of 3.2%.
- In spite of an unchanged revenue, KLK’s core net profit declined
17.8% YoY to RM1,076mil in FY12, dragged down by lower earnings from the
plantation and manufacturing divisions.
- Average CPO price realised was RM2,829/tonne in FY12, 4.4%
lower than the average price of RM2,958/tonne recorded in FY11. FFB production
was flat in FY12 versus FY11.
- Although KLK’s FFB production growth in Malaysia was weak,
this was buffered by a 7% increase in output in its estates in Indonesia in
FY12.
- EBIT of the plantation division shrank 26% YoY to RM1.2bil
in FY12 on the back of an increase in production costs. We believe that
production costs rose to RM1,300/tonne in FY12 from RM1,023/tonne in FY11.
- Comparing 3QFY12 against 4QFY12, earnings of the plantation
division surged 24.1% to RM272mil as higher palm oil production helped cushion
the decline in CPO price.
- EBIT of the manufacturing division (mainly production of oleochemicals)
declined 38.5% from RM83mil in 3QFY12 to RM51mil in 4QFY12 mainly due to
inventory write-downs of RM35.2mil. Excluding the inventory write-downs,
earnings of the division would have been flat QoQ in 4QFY12.
- Earnings of the property division climbed from RM1.4mil to
RM36.9mil in FY12 aided by contributions from the Bandar Sri Coalfields
residential development project. The project is estimated to command a gross
development value of RM3.7bil.
Source: AmeSecurities
No comments:
Post a Comment