Period 3Q12/9M12
Actual vs. Expectations The 9M12 results came in below expectations.
The 9M12 core net profit of RM182m only accounted for 52% and 46% of ours and
the consensus’ FY12 full year forecasts. The lower than expected earnings were
mainly due to higher expectation of the earnings contribution from the
Gamuda-MMC JV this year, which now looks like it will only make a more meaningful
contribution next year.
Dividends As expected, no dividend was declared.
Key Result Highlights
YoY, the 9M12 core net profit of RM182m
increased by 62% despite a lower revenue growth of 8%. This was mainly due to
the strong contribution from its energy division i.e. Malakoff due to a higher
energy volume despatch during the year but this was mitigated by a lower
revenue contribution from Gas Malaysia.
QoQ, the 3Q12 revenue
and core net profit fell 18% and 34% respectively. This was due to the higher operating
cost for its port’s operation and lower revenue contribution from its transport
division. To recap, MMC recorded a RM750m gain from the disposal of Gas
Malaysia upon its listing in 2Q12. However, note that this is excluded from our
core net profit computation.
Outlook There
will be no meaningful contribution from the Gamuda-MMC JV in FY12. The material
contribution will only start in 2Q13 as the tunnelling work starts. The
relisting of Malakoff could put MMC back in the limelight of new flows next
year (2013).
Change to Forecasts We have toned down our FY12 earnings by 23% as
we pushed the earnings contribution from GamudaMMC JV to FY13.
Rating Maintain
MARKET PERFORM
We are maintaining
our MARKET PERFORM recommendation despite the positive news flows expected in
FY13 as the coming general election could raise the sentiment risk on the
stock.
Valuation We are maintaining our fair value at RM2.80
based on SOP valuation.
Risks Delays
in the construction of MRT works and the late delivery of MRT’s TBM (Tunnel
Boring Machine).
Source: Kenanga
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