YTL Power shows signs of recovery

YTL Power shows signs of recovery Written by Financial Daily

Monday, 25 May 2009 11:37

ALTHOUGH YTL Power International Bhd (YTL Power) posted weaker third quarter (3Q) results last week, its performance in the remaining quarter of FY09 would see improvements on the strengthening of the British pound as well as full-quarter contribution from its Singapore power generator PowerSeraya Ltd, MIMB Investment Bank Research said. “We expect a better 4Q on the back of full-quarter contribution from PowerSeraya and the strengthening of the pound. All in, we have trimmed our FY09 estimates by 13% due to a change in foreign exchange (forex) assumption. “We have also incorporated four months’ PowerSeraya earnings forecasts into our model. Besides, we also introduce our FY10-FY11 estimates where earnings are expected to grow 17% on-year and 4% on-year respectively, backed by PowerSeraya earnings,” it said. The research house revised its target price to RM2.10/revised net asset value (RNAV) from RM1.82/RNAV as it rolled over its valuation base to FY10 from FY09. It maintained its neutral stance on YTL Power. YTL Power saw net profit for its third quarter ended March 31, 2009 (3Q09) fall 20% on-year to RM221.4 million from RM277.6 million. Quarter-on-quarter, earnings improved by 3% due to better profits from its water business and new power earnings from PowerSeraya. Earnings per share for the same period was 3.81 sen compared with 5.25 sen previously. Revenue was up 27% to RM1.35 billion from RM1.06 billion. An interim dividend of 3.75 sen, payable on July 16, 2009, was declared. For the nine months to March 31, net income was 18.6% lower at RM616.8 million from RM758.2 million, while revenue was up 5% on-year to RM3.26 billion from RM3.1 billion. The research firm said YTL Power’s earnings for the nine months accounted for 60% and 58% of house’s and street’s FY09 estimates, respectively. “Power generation reported a 151% on-quarter surge in 3Q revenue to RM725.3 million while earnings before interest, tax rose 28% on-quarter as a result of earnings inclusion from the newly acquired PowerSeraya beginning March 6, 2009. There were no surprises from local independent power producers (IPPs),” it said. This article appeared in The Edge financial Daily, May 25, 2009.

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So so so, looks like my YTLPOWR-WB will be safe, haha... looking forward for better earning. yeah!!