Sep 2006 Financial News

PLIPDECO Releases Half Year Results

Sep 01, 2006

Point Lisas Development Corporation Limited (PLD) reported Earnings Per Share (EPS) of 35 cents for the half year ended June 30, 2006. This was 42.62 per cent less than last year’s EPS 61 cents.

The considerable decline was due to a significant reduction in fair value gains of $8.225 million (54.74 per cent). The fair value gains are related to the valuation of its investment properties in accordance with IAS 40. Barring this gain however, there was anaemic growth in its core operations as Turnover increased 2.53 per cent to $97.846 million.

PLD’s Operating Profit fell 23.64 per cent to $26.045 million impacted by the 54.75 per cent drop in Fair Value Gains. Fair Value Gains actually made up 44.05 per cent of PLD’s Operating Profit for HY 2005 compared to 26.11 per cent for HY 2006.

Profit Before Tax fell by a bigger margin (36.91 per cent to $16.874 million) than Operating Profit, as a result of a 45.99 per cent increase in Finance Costs. The rise in Finance Costs was as a result of major investments undertaken to expand capacity and improve productivity in the port sector. Profit After Taxation ultimately fell 41.22 per cent to $14.192 million.

The Chairman anticipates that the investments undertaken will improve future returns based on higher efficiency and overall quality of service in port operation. In light of these results however, we are forecasting a year end EPS of 70 cents. At the current price of $6.75 and the forecasted EPS, PLD is trading at a price/earnings ratio of 9.64. Given that PLD usually trades between 8 to 12 times earnings, we currently recommend this share as a HOLD.

Sreshtha Tewari
WISE Research Team