Period 4Q12/12M12
Actual vs. Expectations The core net profit of RM133.5m (excluding a
RM12.9m tax credit) was broadly in-line with our estimates, accounting for
94.2% of our full-year estimates (RM141.6m). But it was below market estimates,
accounting for 87% of consensus full-year estimates (RM152.8).
Dividends As
expected, a 4th interim DPS of 7.5 sen was declared in 4QFY12.
Key Results Highlights QoQ, revenue was up 14% due to: 1) higher LNG
calls in Q412 (123 calls) versus that in 3QFY12 (101 calls) as there had been a
shutdown in the LNG plant in July-12. However, the core net profit was up by
marginal 3.3% due to: 1) higher operating expenditure to account for maintenance
works in the port; and 2) higher tax expenses incurred within the quarter.
YoY, the 4Q12 core net profit was up (+42.1%)
mainly due to lower than expected tax expenses.
YTD, core net profit was flat at an increment
of 0.4%, which goes to show that BIPORT’s earnings are relatively stable.
Outlook Near
term focus will still be on BIPORT’s finalisation of terms and conditions of
the Samalaju concession agreement.
We believe that the agreement will come around
the same time that BIPORT finalises its financing scheme. Recall that in
end-2012 it had announced its intention to: 1) perform a private placement of
up to 15% of its paid-up capital to its major shareholders; and 2) issue SUKUK
bonds (the exact value of which has not been finalised).
Assuming the maximum 15% private placement
(c.60m shares) it could raise cash proceeds of RM380m, leaving another RM1bn to
be funded, which in our view will be satisfied partly by the Sukuk issuance
that BPORT is eyeing. Earlier, BIPORT received a RM500m-grant from the federal
government to finance the construction of Samalaju Port.
Change to Forecasts Whilst we earnings were within an expectation,
we are fine-tuning our FY13-14 core net earnings estimates for higher revenue
growth of 5.5% p.a. but higher operating costs, as such we have reduced our
estimates by 4.4% and 0.9% respectively.
Rating Maintain
MARKET PERFORM
Valuation New
target price of revised to RM7.03 (from RM7.18 inline with lower earnings
estimates) based on a DCF valuation (WACC: 9.6%). Given the total upside of
5.7% we maintain our Market Perform call.
Risks (i)
Lower than expected port and bulking division activities and (ii) a higher than
expected CAPEX for the Samalaju port, which could interrupt BIPORT’s steady cashflows.
Source: Kenanga
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