Period 4Q12
and FY12
Actual vs. Expectations FY12 core net profit* of RM761m was within expectations,
as it accounted for 98% of consensus’ forecast of RM780m and was quite close to
our estimated RM760m.
Dividends Final
single tier dividend of 8.5 sen was announced and is within our expectation.
Key Results Highlights YoY, FY12 core net profit tumbled 48% to RM761m
due to lower CPO prices of RM2843/mt (-12% from FY11’s RM3218/mt). This has
caused plantation division PBT to decline 36% to RM1.36b. Sugar division
earnings also decline 34% to RM313m.
QoQ, 4Q12 core net profit tumbled 30% to RM140m
as plantation division PBT decline 55% to RM262m. Although FGV does not
disclose its 4Q12 CPO price, MPOB data shows that average CPO prices has
declined 23% QoQ to RM2189/mt in 4Q12.
Outlook We
expect FY13E CPO prices to average at RM2500/mt in FY13E vs. consensus average
of RM2950/mt. With YTD CPO prices at only RM2308/mt, consensus’ earnings
downgrade may continue for FGV and pressure its share price.
Change to Forecasts Maintaining FY13E core net profit of RM782m.
Rating Maintain
UNDERPERFORM
Prospects of weakening CPO prices could cause the
market to downgrade earnings further, which adds downside risks to its share
price.
Valuation Maintaining our Target Price of RM4.00 based
on an unchanged Fwd. PER of 18.7x on the CY13E Core EPS of 21.4 sen.
Risks Better
than expected CPO prices.
Source: Kenanga
No comments:
Post a Comment