Evergreen plunged into the red in 4QFY12, posting net losses of RM4.6m for the quarter on the back of both lower sales volume and weaker ASPs. FY12 earnings of RM33.6m (-46.8% y-o-y) missed expectations amid significant revenue and cost pressures. Challenges continue to plague the company as additional production capacity in other ASEAN countries intensifies competition. We are slashing our FY13-FY14 net profit forecast by 22.1%-29.0%, thus lowering our FV to RM0.60. Maintain NEUTRAL.
Far below estimates. Evergreen registered 4QFY12 revenue of RM235.3m (-20.5% y-o-y, -5.1% q-o-q) and losses amounting to RM6.4m as operations suffered the double whammy of both weaker sales volume and selling prices. Full year FY12 revenue and earnings came in at RM1,032.0m (-2.8% y-o-y) and RM33.6m (-46.8% y-o-y) on the back of sharp increases in glue and log prices (higher raw material costs), higher electricity rates, weak sales volumes and declining selling prices. FY12 was a year characterized with significant revenue and cost pressures, which led to a 2.4ppt EBITDA margin contraction. The year’s earnings accounted for only 59.4% of our and 61.7% of consensus estimates.