TAANN (5012) : Ta Ann’s 9MFY14 core earnings exceed forecasts
Ta Ann Holdings Bhd
(Nov 26, RM3.92)
Maintain “outperform” with unchanged target price (TP) of RM4.88: Ta Ann’s nine months of financial year 2014 (9MFY14) core earnings of RM85.3 million surpassed our and consensus forecasts, accounting for 85% and 87% of full-year estimates respectively, after excluding the final tranche of compensation from the Tasmanian government totalling RM17 million.
Nevertheless, we maintain our earnings forecast for this year as we expect weaker earnings in the last quarter due to lower contribution from plantations resulting from weaker crude palm oil (CPO) selling prices and an estimated 8% to 12% drop in fresh fruit bunch (FFB) production compared with the third quarter.
Meanwhile, a second interim single-tier dividend of 10 sen was announced. Year-to-date, it has declared a total dividend per share of 20 sen, which has exceeded our forecast by 20%. We reaffirm our “outperform” call with an unchanged sum-of-parts-based TP of RM4.88.
The stronger year-on-year (y-o-y) sales of 3QFY14 were mainly led by an increase in the plantation (+16.9%) and timber (+52.2%) segments.
Log export and plywood sales were up 20% and 25% respectively. Meanwhile, average selling price for logs was up 4% y-o-y to US$259 (RM1,750) per cubic metre while average plywood price remained at US$524 per cubic metre.
Better plantation sales were mainly driven by stronger FFB production, up 6%, which also offset weaker average CPO selling price of RM2,089 per tonne, lower by 7%.
3QFY14 core earnings were down slightly to RM28 million. Plantation earnings weakened to RM27 million from RM30 million mainly due to lower CPO selling prices and higher operating costs.
Timber earnings remained at RM18 million after stripping the second and final tranche of compensation payments received from the Tasmanian government.
Logging earnings jumped 21% to RM23 million, while plywood suffered losses of RM5 million as the average plywood selling price was below the production cost of RM535 to RM545 per cubic metre. — PublicInvest Research, Nov 26
http://www.theedgemarkets.com
Ta Ann Holdings Bhd
(Nov 26, RM3.92)
Maintain “outperform” with unchanged target price (TP) of RM4.88: Ta Ann’s nine months of financial year 2014 (9MFY14) core earnings of RM85.3 million surpassed our and consensus forecasts, accounting for 85% and 87% of full-year estimates respectively, after excluding the final tranche of compensation from the Tasmanian government totalling RM17 million.
Nevertheless, we maintain our earnings forecast for this year as we expect weaker earnings in the last quarter due to lower contribution from plantations resulting from weaker crude palm oil (CPO) selling prices and an estimated 8% to 12% drop in fresh fruit bunch (FFB) production compared with the third quarter.
Meanwhile, a second interim single-tier dividend of 10 sen was announced. Year-to-date, it has declared a total dividend per share of 20 sen, which has exceeded our forecast by 20%. We reaffirm our “outperform” call with an unchanged sum-of-parts-based TP of RM4.88.
The stronger year-on-year (y-o-y) sales of 3QFY14 were mainly led by an increase in the plantation (+16.9%) and timber (+52.2%) segments.
Log export and plywood sales were up 20% and 25% respectively. Meanwhile, average selling price for logs was up 4% y-o-y to US$259 (RM1,750) per cubic metre while average plywood price remained at US$524 per cubic metre.
Better plantation sales were mainly driven by stronger FFB production, up 6%, which also offset weaker average CPO selling price of RM2,089 per tonne, lower by 7%.
3QFY14 core earnings were down slightly to RM28 million. Plantation earnings weakened to RM27 million from RM30 million mainly due to lower CPO selling prices and higher operating costs.
Timber earnings remained at RM18 million after stripping the second and final tranche of compensation payments received from the Tasmanian government.
Logging earnings jumped 21% to RM23 million, while plywood suffered losses of RM5 million as the average plywood selling price was below the production cost of RM535 to RM545 per cubic metre. — PublicInvest Research, Nov 26
http://www.theedgemarkets.com
