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Bimbsec - Ijmplnt 4qfy12 Result - 20120530

Bimbsec - Ijmplnt 4qfy12 Result - 20120530

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Published by: Bimb Sec on May 30, 2012
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BIMB SECURITIES RESEARCH
MARKET INSIGHT
Wednesday, 30 May, 2012
Result Review
PP16795/03/2013(031743)
 
| 1
IJM Plantations 
Buy
◄►
 
Below
 
Record revenue but lagging profits
Price: RM3.00Target:
(+16.7%)
RM3.50
g Keat Yung
 
3-26918887 ext 181
 
IJM Plantations FY12 revenue of RM590.4m is a 16.6%increase from FY11. Aligned with higher revenue, netprofit rose at a slower 6.9% to RM157.3m mainlyattributed to the RM11.0m impairment loss occurred in4QFY12. Full year earnings accounted less than 90.0% of our forecast. As such, we are revising downward ourearnings estimates by 15.4% and 8.7% for FY13 and FY14respectively. As a result, our target price is lowered toRM3.50. Still a Buy.Impacted by impairment loss.
Despite the encouraging36.0% y-o-y growth in revenue for 4QFY12, IJM
Plantations’ earnings were
hit by the RM11.0mimpairment loss from the co-generation plant and higherfield upkeep maintenance. Net profit plunged 72.7% toRM7.1m. Excluding the impact of impairment loss, netprofit is still 30.3% below
4QFY11’s
net profit of RM25.9m.
Record full year revenue, but...
For FY12, IJM Plantationsregistered revenue of RM590.4m, which is 16.6% higherthan RM506.3m achieved in FY11. Aligned with therevenue growth, net profit increased 6.9% to RM157.3mfrom RM147.2m previously. The Group attributed theimprovement to higher FFB production and favourablecommodity prices.
FY11 FY12 Change
FFB prod. (‘000mt)
 
575.2 648.9 12.8%
CPO Price (RM/mt)
2,760.0 3,049.0 10.5%
PKO Price (RM/mt)
4,259.0 4,102.0 -3.7%
Forecast.
FY12 net profit of RM157.3m accounted for only83.6% of our forecast. Without the impairment loss, it isstill below our full year forecast of RM188.2m. In view of this, we have revised down our earnings estimates by15.4% and 8.6% for FY13 and FY14 respectively.
10 sen dividend.
The Board has declared a single tierdividend of 10 sen/share for FY12 which is payable on 3
rd
 July 2012 and will trade ex-dividend on 13
th
June 2012.
View and Valuation.
Subsequent to the earningsdowngrade, we have cut our target price to RM3.50 (fromRM4.00 previously) which was derived based on a 3-yearaverage P/E ratio of 16.2x on a rolling 12 months EPS of 21.5sen. Still a
Buy
.
Stock Data
Bloomberg TickerIJMP MKAltman Z-score4.58 Market Cap (RM'mn)2,405YTD price chg6.38 Issued shares (mn)802YTD KLCI chg2.26 52-week high3.42Beta0.76 52-week low2.38 
Major Shareholders
3-mth avg daily volume ('00)4,665IJM Corp Bhd55.11%Free Float30.97EPF13.08%Shariah CompliantYSchroder2.06%
Share Performance (%)
1mth3mth12mthAbsolute(8.54)(10.45)9.05  vs. KLCI(8.39)(10.20)4.88 
Financial Highlights
FYE 31 Mar201120122013E2014E2015E
FFB Prod. ('000 mt)575.2648.9659.0750.9896.1Turnover506.3590.4620.2645.3700.2EBIT191.2216.5235.3241.6260.7Pretax profit196.0215.2230.7235.0252.7
Net Profit147.2157.3172.6175.9189.1
EPS (sen)18.3719.6221.5321.9423.59Gross DPS (sen)8.0010.0010.5011.0011.50Div Yield (%)2.673.333.503.673.83NTA/share (RM)1.521.641.751.861.98PE Ratio16.3315.2913.9313.6712.72EBIT Margin37.76%36.66%37.94%37.43%37.23%Pretax Margin38.72%36.46%37.19%36.42%36.08%Effective tax rate24.91%25.00%25.00%25.00%25.00%ROE11.71%11.61%11.95%11.47%11.63%ROA10.18%9.20%8.75%8.43%8.63%Net Gearing (x)N. CashN. CashN. CashN. CashN. Cash
Growth Ratios
FFB-4.87%12.80%1.57%13.94%19.34%Turnover24.47%16.62%5.04%4.05%8.50%EBIT68.77%13.24%8.03%2.66%7.92%Pretax profit74.03%9.81%4.82%1.90%7.50%Net profit85.18%6.88%9.74%1.90%7.50%
Share Price Chart
2.32.52.72.93.13.33.5
     M    a    y  -     1     1     J    u    n  -     1     1     J    u     l  -     1     1     A    u    g  -     1     1     S    e    p  -     1     1     O    c    t  -     1     1     N    o    v  -     1     1     D    e    c  -     1     1     J    a    n  -     1     2     F    e     b  -     1     2     M    a    r  -     1     2     A    p    r  -     1     2
 
 
30 May 2012 Result Review: IJM Plantations 4QFY12
www.bimbsec.com.my
 |
2
 
Quarterly figures
 
FYE 31 Mar (RM'm) Mar-11 Jun-11 Sep-11 Dec-11 Mar-12 QoQ YoY Chg 12MFY11 12MFY12 YTD Chg
Revenue 99.0 128.4 180.9 146.4 134.7-8.036.1 506.3 590.4 16.6EBIT 32.7 66.4 62.9 68.5 15.7-77.1 -52.2196.0 213.4 8.9 Pretax profit 32.7 66.4 62.9 71.6 14.4-79.8 -55.9196.02 215.25 9.8 Taxation-6.8 -16.9 -15.9 -17.7 -7.42 -57.99.0-48.82 -57.8218.4 Minority interest 0.0-0.0 -0.1 -0.00.1-560.03,350.0-0.0 -0.1NM Net Profit 25.9 49.5 46.9 53.9 7.1-86.9 -72.7147.2 157.3 6.9 EPS (sen) 3.23 6.17 5.85 6.72 0.88-86.9 -72.818.37 19.62 6.8 Net gearing (x) N. Cash N. Cash N. Cash N. Cash N. Cash N/A N/A N. Cash N. Cash N/AEBIT margin (%) 33.07 51.72 34.75 46.75 11.62-75.2 -64.938.72 36.14-6.7  PBT margin (%) 33.07 51.72 34.75 48.87 10.71-78.1 -67.638.72 36.46-5.8  Net margin (%) 26.19 38.55 25.91 36.80 5.25-85.7 -80.029.07 26.64-8.4  Effective tax rate (%) 20.81 25.41 25.25 24.67 51.47 108.6 147.3 24.91 26.86 7.9
Source: BIMB Securities
 
Income Statement
 
FYE 31 Mar (RM'm) 2010 2011 2012 2013E 2014E 2015E
Revenue 406.7 506.3 590.4 620.2 645.3 700.2EBITDA 148.5 215.4 243.3 291.4 303.8 324.8
Pretax profit
112.6 196.0 215.2 230.7 235.0 252.7Tax(33.0) (48.8) (57.8) (57.7) (58.8) (63.2)  MI(0.2) (0.0) (0.1) (0.3) (0.4) (0.4) 
Net profit
79.5 147.2 157.3 172.6 175.9 189.1Net profit growth (%)-35.585.2 6.9 9.7 1.9 7.5EPS (sen) 11.0 18.4 19.6 21.5 21.9 23.6EPS growth (%)-36.266.8 6.8 9.7 1.9 7.5Gross DPS (sen) 5.0 8.0 10.0 10.5 11.0 11.5Dividend yield (%) 1.67 2.67 3.33 3.50 3.67 3.83NTA/share (RM) 1.43 1.52 1.64 1.75 1.86 1.98Net gearing (x) N. Cash N. Cash N. Cash N. Cash N. Cash N. CashPER (x) 27.25 16.33 15.29 13.93 13.67 12.72P / NTA (x) 2.10 1.97 1.83 1.71 1.61 1.51ROE (%) 7.80 11.71 11.61 11.95 11.47 11.63ROA (%) 6.54 10.18 9.20 8.75 8.43 8.63
Source: BIMB Securities
 
Balance Sheet
 
FYE 31 Mar (RM'm) 2010 2011 2012 2013E 2014E 2015E
Current assets 309.0 297.4 417.2 584.8 590.3 681.6Non-current assets 1,078.4 1,206.9 1,425.0 1,445.9 1,552.4 1,556.9
Total Assets 1,387.5 1,504.3 1,842.3 2,030.8 2,142.6 2,238.5
Current liabilities 42.8 45.6 80.1 74.2 72.3 69.9Non-current liabilities 139.0 150.4 374.1 464.7 490.5 491.7Shareholders' fund 1,203.9 1,306.0 1,383.9 1,489.3 1,577.0 1,673.9Minority interest 1.6 2.3 4.2 2.7 2.9 3.1
Equity & liabilities 1,387.5 1,504.3 1,842.3 2,030.8 2,142.6 2,238.5
Source: BIMB Securities
 

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