Period 4Q12/FY12
Actual vs. Expectations
Full year FY12
results came in
within our expectations but
slightly below that of the consensus.
FY12 core net profit of RM429.9 came in at 96% and 88% of
ours and the consensus’ forecasts respectively.
Dividends Second interim dividend of 8 sen (single
tier)
Key Result Highlights
QoQ, the core net profit of RM104.8m dropped by 22% despite
a marginally higher revenue (+4%).
This was partly
due to an
80% drop in the plantation pre-tax profit from RM71.6m
to RM14.4m (-80%) as a result of higher operating cost i.e. fertilizer cost and
impairment of its bio plant at c.RM11m. Infrastructure division’s pretax profit
also fell by 12% due to a forex loss of RM15.3m and the write-off of revenue recognition
from one of the highway projects in India Vijay Toll highway.
YoY, core net profit was commendably better than last year’s
loss of RM20.2m despite a 7% drop in revenue, mainly due to a higher margin recorded
by the construction and property divisions. Construction turned up a profit in
4Q12 as compared to it being loss making last year.
Property margin has increased from 9% to 23% with more sales
coming along from its property launches.
Total one-off loss for FY12 was at RM20.8m, which was not
included in our core net profit.
Outlook The NPE highway project will get the approval
from the government in the next few months.
Construction of MRT will be busier by end of this year to
early next year.
The details of the WCE concession will be out in the near
term and management reiterated that most of the initial structure will be
maintained.
Change to Forecasts
We lowered our FY13 and FY14 estimates slightly by 4% as we
lowered our plantation earnings by 6.1% and 5.8% respectively
Rating MAINTAIN MARKET PEFORM
Maintain our MARKET PERFORM rating as the expected total
return is below 10%.
Valuation We lowered our Target Price to RM5.56 from RM5.64
previously as we have cut the in-house valuation for IJM Plantation by 6%.
Risks Delays in contract award i.e. on ETP based projects.
Source: Kenanga
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