LNG vessel calls, cargoes remain top contributor for Bintulu Port

KUCHING: Bintulu Port Holdings Bhd’s (Bintulu Port) financial year 2016 (FY16) net profit surpassed analysts’ expectations while the group’s fourth single-tier interim dividend of six sen also came within expectation.

As per the interim financial statement filed on Bursa Malaysia, Bintulu Port’s net profit for the cumulative quarter ending December 31, 2016 amounted to RM149.8 million.

Bintulu Port’s FY16 net profit came in above the research arm of Kenanga Investment Bank Bhd’s (Kenanga Research) expectations at 108 per cent.

According to Kenanga Research, the better-than-expected results were due to stronger revenue contributions from the handling of liquefied natural gas (LNG), ferro-alloy cargo, general cargo and container segments in the fourth quarter of 2016 (4Q16), while 3Q16 results were well within the research arm’s expectation.

A fourth single-tier interim dividend of six sen was declared, bringing FY16 dividend per share (DPS) to 24 sen which was spot on with the research arm’s FY16 estimate.

“Going forward, the handling of LNG vessel calls and cargoes is still expected to be the largest revenue contributor for the group, backed by palm oil, container, bulk fertiliser and alumina cargoes.

“Phase 1 of Samalaju Port is expected to be completed by 2Q17, but throughput and earnings contribution is not expected to be significant in the near-term, i.e. FY17-18,” Kenanga Research said.

The research arm has however noted that longer-term prospect hinges on Samalaju as it will potentially stimulate the economic activities in Sarawak on the back of the Sarawak Corridor of Renewable Energy (SCORE) initiative.

Kenanga Research upgraded its FY17E earnings by four per cent to RM150.8 million on slightly higher volume and container charges and introduced FY18E net profit of RM156.6 million.

“Our FY17-18E are based on modest low to mid-single digit cargo throughput growth assumptions, in line with growth assumptions for other ports under our coverage as we remain conservative due to the lacklustre global outlook,” it said.

Kenanga Research has in turn upgraded the stock to ‘outperform’ and increased target price to RM6.78 per share on higher earnings.

The research arm’s Target Price implied a 20.7-fold price earnings ratio (PER) FY17E earnings, which was on par with Westports’ FY17E PER of 21.1-fold, while most positives have been priced in.

“We are comfortable with our estimates and thus upgrade our call to ‘outperform’ as share price has corrected, while dividend yields are compelling at 4.3 per cent, commanding 16.7 per cent total returns at current levels,” it said.

What do you think of this story?
  • Great (100%)
  • Angry (0%)
  • Sad (0%)
  • Nothing (0%)
  • Interesting (0%)

 

Affiliates

 

Supplement Downloads

Member of