Period 4Q12 / FY12
Actual vs. Expectations
The reported FY12 net profit of
RM115.4m came in within expectations, accounting for 96% and 98% of ours and
the street’s estimates of RM120.0m and RM118.3m respectively.
Dividends A dividend of 2 sen was declared, which was
above expectations.
Key Results Highlights
QoQ, the 4Q12 earnings grew 26% to
RM32.1m underpinned by a 14% growth in revenue and a gross margin expansion of
12ppt to 30% mainly driven by projects from the Middle East like King Abdullah
Petroleum Studies & Research Center (KAPSARC) and CMA Towers in Saudi
Arabia, Qatar Faculty of Islamic Studies, National Museum of Qatar and Qatar
Foundation Headquarter in Qatar, Al-Jalila Children’s Specialty Hospital in
Dubai, Yas Mall Phase 2 in Abu Dhabi and the Salalah Airport expansion in Oman.
YoY, the 4Q12 pretax
profit increased by 30% to RM46.1m due to lower operating and administrative expenses
and a higher other income from the sales of scrap and also a reversal of the
previous financial year’s provision for contract claims. However, the net
profit slipped 12% due to a higher effective tax rate of 26.6%, which increased
by 24.3ppt.
YoY, the full year
FY12 earnings of RM115.4m decreased marginally by 3.4% on a weaker construction
revenue from the Middle East (-21%) and a higher effective tax rate of 11.3%
despite the significant improvement in earnings from India and Malaysia.
Outlook The current order book stands at RM1.6b, which
will provide at least another two years of earnings visibility for the group.
We believe that with its recent investment in Technics Oil & Gas,
Eversendai will be able to leverage on the former’s strength and expertise to
bid for more Oil & Gas related jobs.
Change to Forecasts No changes to our FY13-FY14 forecast at this juncture.
Rating Maintain OUTPERFORM
We are maintaining
our OUTPERFROM rating given the attractive upside of 31% to our Target Price of
RM1.51.
Valuation We are maintaining our Target Price at RM1.51 based
on an unchanged 8.0x PER on our FY13 EPS.
Risks Higher raw material costs and delays in
ETP-based project awards.
Source: Kenanga
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