Period 4Q12 / FY12
Actual vs. Expectations
GENP FY12 core net profit* of RM329m
is within expectations. It made up 100% of the consensus estimate of RM330m and
105% of ours of RM313m.
Although the CPO
price declined substantially in 4Q12, the exceptionally high FFB volume in 4Q12
has supported its earnings. Note that Sabah estates FFB yield has recovered
slightly later in 4Q12 (against 3Q12 for other states).
Dividends As expected, a final dividend of 5.50 sen was recommended
together with a special dividend of 2.75 sen. Combined with previous interim dividend
of 4.25 sen, the total gross dividend for FY12 came up to 12.50 sen (net: 9.38
sen).
Key Results Highlights
YoY, the FY12 core net profit declined
25% to RM329m as CPO prices fell 14% to an average RM2784/mt. Better earnings
from its property division (EBIT rose 73% to RM40m) mitigated the group
earnings decline, but its contribution was still small.
QoQ, the 4Q12 core
net profit declined 6% to RM89m as the average CPO price tumbled 22% to
RM2219/mt. Better earnings from property division (EBIT rose 184% to RM18m)
again mitigated the group earnings decline here.
Outlook The current low CPO prices should keep the share
price upside limited.
Change to Forecasts
Maintaining our FY13E-FY14E earnings of RM319m-RM378m.
Our key assumptions are FY13E-FY14E CPO average prices of RM2500-RM2700 per mt.
Rating Maintain UNDERPERFORM
We believe the worst
is not yet over for GENP as its FY13E should still stay low (-3% YoY to RM319m).
Valuation Maintaining our TP of RM7.60 based on an unchanged
Fwd. PER of 17.6x to its CY13E EPS of 43.1 sen.
Risks Better than expected CPO prices.
Source: Kenanga
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