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Tuesday, May 3, 2011

PT. Indocement Tunggal Perkasa - Solid 1Q11 Result

by Samuel Securities

Highlights: PT Indocement Tunggal Prakarsa (INTP) 1Q11 earnings grew by 10.3% YoY to Rp868bn, while revenue reached Rp2.94tn up by 15.5% YoY. While on QoQ basis, revenue slipped by 2.8% while net profit slightly grew by 3%.

Comments: INTP’s 1Q11 result came slightly ahead our expectation as its revenue and net profit accounted for 23.4% and 23.8% of our FY estimate. Similar with other cement companies, INTP’s EBIT and net margin eroded by 240bps and 140bps YoY to 36% and 29.5%, respectively. INTP booked lower margin in 1Q11 mainly due to higher energy cost with fuel and power cost surged by 14.6% YoY. The company’s COGS/ton rose by 11.3% YoY to Rp442.2k/ton vs Rp397.2k/ton in 1Q10. On the balance sheet side, the company’s book remained clean in 1Q11 with net cash position reaching Rp4.9tn with low capex requirement in the next 2 years.

Action & Recommendation: Despite showing some cost pressure in 1Q11, we still maaintain our earnings projection on the company as the company still able to meet our expectation. We view INTP will have the least earnings revision as compared to its peers in the future. Currently, INTP is trading at 17.3x ‘11F PE and 10.3x ‘11F EV/EBITDA. With expected dividend yield of 2.5% in next month, we maintain our Buy recommendation on the counter. BUY

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