Core operating profit was S$351m. Another bright note was O&M’s improved operating profit margin of 11.1%, reflecting margin sustainability despite weak macro environment. An interim dividend of 15S¢ was declared. No special dividend was proposed despite the gain from the favourable sale of Keppel’s entire stake of SPC to PetroChina as Keppel conserves cash for possible M&As. Thus, we think some investors may be disappointed. Nevertheless, we surmise this is a good set of results and Keppel remains well positioned to ride on secular growth trends in all the core businesses. We have raised our FY09F PATMI by 9% to account for better margins. Our revised target price is S$8.82 (from S$8.60 previously). Maintain BUY.
Financial snapshot. 2Q09 revenue of S$3.2b was up 21% YoY, 8% QoQ, with stronger-than-expected contributions from O&M (buoyed by several successful deliveries) and Property (boosted by strong residential sales). This higher revenue and improved O&M execution capability led to core operating profit of S$351m (+26% YoY, +12% QoQ), exceeding our estimate. Hence, the Group’s operating profit margin expanded from 9.9% in 2Q08 to 11.3% in 2Q09. O&M’s margin edged up to 11.1%, giving us comfort on O&M’s execution capability. Infrastructure’s margin was 4%.
One-off net gain of S$422m included Keppel’s gain of S$614m from its sale of SPC to PetroChina, impairment losses arising from Infrastructure assets of S$189m and operations restructuring cost of S$4m.
Tweak our FY09F estimates, TP raised to S$8.82, Maintain BUY. We have raised the EBIT margins for O&M by 10bp, but lowered the EBIT margins for Property by 50bp for FY09F. Hence, our FY09F net profit estimate is raised by 9%. No change has been made to FY10F earning. Our target price is revised to S$8.82 (from S$8.60 previously). At our target price, Keppel is trading at 9.3x FY09F P/E and 2.6x FY09F P/B against ROE of 27.6%.
Sponsored Links
No comments:
Post a Comment