Month: November 2010
SATS – DMG
Serving yet another strong quarter
SATS registered 2Q11 PATMI of S$45.2m (+10.5% YoY, +2.0% QoQ) on the back of S$401.2m in revenue (+10.7% YoY, +5.0% QoQ). This is in line with our expectations. Excluding the effect of jobs credit of S$6.3m in 2QFY10, PATMI would have risen by 30.6% YoY. 1HFY11 PATMI amounts to S$89.5m while 1HFY10 revenue amounts to S$783.3m, making up 46.8% and 47.0% of our full year forecasts. An interim dividend of 5 S¢ was declared and is payable on 2 Dec. Management remains optimistic on its outlook with particular emphasis on the coming 3Q which is seasonally its strongest. Key challenge going forward would be the rising prices of food. Our DCF-derived fair value of S$3.25 implies an FY11F P/E of 18.7x. Based on last closing, there is a 12.5% upside. Maintain BUY.
2QFY11 revenue grew 10.7% YoY to S$401.2m. Revenue growth was achieved on the back of increased flights handled as well as higher cargo and meal volumes. Non aviation revenue grew 14% to S$164.1m as a result of higher catering revenue stemming from the one-off provision of meals for the Youth Olympic Games (YOG) and higher contribution from its UK operations, particularly in the fruit and chilled ready meals categories. Contributions from its overseas associates rose 51% YoY to S$15.9m boosted by higher volumes in overseas ground handling joint ventures.
Outlook. Management was positive on its coming 3Q which has traditionally been its strongest quarter, due to the holiday and festive season. Revenue from its UK operations are also expected to be stronger in the second half due to seasonality. A key concern that was raised during the analyst briefing was the rising cost of food prices which is expected to remain a challenge going forward.
SATS – DMG
Serving yet another strong quarter
SATS registered 2Q11 PATMI of S$45.2m (+10.5% YoY, +2.0% QoQ) on the back of S$401.2m in revenue (+10.7% YoY, +5.0% QoQ). This is in line with our expectations. Excluding the effect of jobs credit of S$6.3m in 2QFY10, PATMI would have risen by 30.6% YoY. 1HFY11 PATMI amounts to S$89.5m while 1HFY10 revenue amounts to S$783.3m, making up 46.8% and 47.0% of our full year forecasts. An interim dividend of 5 S¢ was declared and is payable on 2 Dec. Management remains optimistic on its outlook with particular emphasis on the coming 3Q which is seasonally its strongest. Key challenge going forward would be the rising prices of food. Our DCF-derived fair value of S$3.25 implies an FY11F P/E of 18.7x. Based on last closing, there is a 12.5% upside. Maintain BUY.
2QFY11 revenue grew 10.7% YoY to S$401.2m. Revenue growth was achieved on the back of increased flights handled as well as higher cargo and meal volumes. Non aviation revenue grew 14% to S$164.1m as a result of higher catering revenue stemming from the one-off provision of meals for the Youth Olympic Games (YOG) and higher contribution from its UK operations, particularly in the fruit and chilled ready meals categories. Contributions from its overseas associates rose 51% YoY to S$15.9m boosted by higher volumes in overseas ground handling joint ventures.
Outlook. Management was positive on its coming 3Q which has traditionally been its strongest quarter, due to the holiday and festive season. Revenue from its UK operations are also expected to be stronger in the second half due to seasonality. A key concern that was raised during the analyst briefing was the rising cost of food prices which is expected to remain a challenge going forward.
MIIF – BT
MIIF Q3 earnings up 40.7% to $33.2m
Increased earnings due to higher investment income
MACQUARIE International Infrastructure Fund (MIIF) yesterday reported net profit attributable to equity holders of $33.2 million for the third quarter, up 40.7 per cent year on year.
The earnings boost was on higher investment income. Total revenue for the three months ended Sept 30 was $35 million, up 37.7 per cent from $25.4 million for Q3 last year.
For the nine-month period, however, net profit fell 35.9 per cent to $33.2 million. And total revenue fell 23 per cent to $43.8 million.
MIIF said the falls were in line with expectations and follow the disposal of interests in Macquarie European Infrastructure Fund during Q4 2009, and Arqiva and the Canadian Aged Care in the current year. Arqiva is a communications infrastructure and media services company with a presence in Ireland, mainland Europe and the US.
MIIF said its core Asian infrastructure businesses, such as its Chinese port and expressway units, continue to perform strongly. ‘Revenue at Changshu Xinghua Port is up significantly due to continued cargo diversification, while Hua Nan Expressway has witnessed strong growth in traffic due to continuing economic recovery in the Guangdong region and the opening of phase three of the road,’ said John Stuart, CEO of MIIF’s manager, Macquarie Infrastructure Management (Asia).
‘Management continues to focus on executing MIIF’s strategy of acquiring Asian infrastructure businesses,’ he said. ‘We have reviewed a number of investment opportunities in which to deploy MIIF’s significant cash balances. However, none of these have met the strict investment criteria that we apply.’
MIIF said in its financial statement that it has cash and cash equivalents of $487.7 million.
MIIF units lost half a cent yesterday to close at 58 cents.
MIIF – BT
MIIF Q3 earnings up 40.7% to $33.2m
Increased earnings due to higher investment income
MACQUARIE International Infrastructure Fund (MIIF) yesterday reported net profit attributable to equity holders of $33.2 million for the third quarter, up 40.7 per cent year on year.
The earnings boost was on higher investment income. Total revenue for the three months ended Sept 30 was $35 million, up 37.7 per cent from $25.4 million for Q3 last year.
For the nine-month period, however, net profit fell 35.9 per cent to $33.2 million. And total revenue fell 23 per cent to $43.8 million.
MIIF said the falls were in line with expectations and follow the disposal of interests in Macquarie European Infrastructure Fund during Q4 2009, and Arqiva and the Canadian Aged Care in the current year. Arqiva is a communications infrastructure and media services company with a presence in Ireland, mainland Europe and the US.
MIIF said its core Asian infrastructure businesses, such as its Chinese port and expressway units, continue to perform strongly. ‘Revenue at Changshu Xinghua Port is up significantly due to continued cargo diversification, while Hua Nan Expressway has witnessed strong growth in traffic due to continuing economic recovery in the Guangdong region and the opening of phase three of the road,’ said John Stuart, CEO of MIIF’s manager, Macquarie Infrastructure Management (Asia).
‘Management continues to focus on executing MIIF’s strategy of acquiring Asian infrastructure businesses,’ he said. ‘We have reviewed a number of investment opportunities in which to deploy MIIF’s significant cash balances. However, none of these have met the strict investment criteria that we apply.’
MIIF said in its financial statement that it has cash and cash equivalents of $487.7 million.
MIIF units lost half a cent yesterday to close at 58 cents.
SATS – Phillip
•Revenue increased by 10.7% to S$401.2mn, while PATMI increased 10.5% to S$45.2mn.
•Long term trend of strong aviation performance still intact as observed from proxy indicators.
•Raw material cost for food business could increase pressure on margins.
•Maintain Buy recommendation with target price of S$3.21.
2QFY11 Results Discussion. The result for this quarter is slightly lower than our expectations. We have observed stronger than estimated top line growth driven by increases in both the Food Solutions & Airport Services segment. Our margin estimates were slightly off and that resulted in an overestimate of S$3.4mn to the shareholder’s profit for the quarter. The operating statistics were also slightly below our expectations. Therefore, we revised our full year profit estimates slightly downwards from S$207.6mn to S$191.5mn.
Key Risk. Increase in raw food prices; consumer preference for LCC reduces scope of airport services; third ground handler at Changi Airport.
Valuation. We roll over the BVPS and EPS estimates and used the blended FY11/12 BVPS of $1.43 and EPS of 17.2¢ to get our revised target price of $3.21. Thus, we maintain our Buy call with forecasted total returns of 15.6% after incorporating dividends payout of 13¢ over the next 12 months.