May 2007 Financial News

AMCL Releases First Quarter Results

May 29, 2007

Results for the First Quarter Ended March 31, 2007

For the First Quarter Ended March 31, 2007, Ansa McAL Group of Companies Limited (AMCL) reported Earnings Per Share (EPS) of $0.67, which was up on the corresponding quarter of FY06 by an outstanding 28.85 per cent or $0.15.

Sales for the period amounted to $1.11 billion compared to $915.30 million in Q106, a noteworthy increase of 21.14 per cent or $193.52 million. Operating Income also saw significant growth, up 28.89 per cent or $45.27 million on the comparable period in 2006 to $201.97 million in Q107.

The Group saw a marginal decline in Finance Costs, with this figure moving from $29.21 million in Q106 to $28.99 million in Q107- a fall of 0.77 per cent. However, Share of Results of Associated Company/Joint Venture saw a considerable decline of 71.13 per cent, from $6.76 million in Q106 to $1.95 million in the quarter under review. Thus, Profit Before Taxation ended the three month period at $174.94 million, up by an outstanding 30.31 per cent or $40.69 million on the same period in 2006.

The Effective Tax Rate for the quarter ended March 31, 2007 was 21.14 per cent compared to a rate of 19.43 per cent for the corresponding period in FY06. Consequently, Profit After Taxation stood at $137.97 million, up 27.54 per cent or $29.79 million on the same figure for Q106.

According to the Chairman’s Statement, the Group continues to focus on monetizing the recent significant investments in new plant and equipment whilst maximizing efficiencies and productivity. Additionally, it was noted that all sectors in the Group have exceeded prior period results.

The Directors are confident that the growth trend will continue into the second quarter of fiscal 2007.

AMCL is currently trading at a price of $48.97 on the local market. In light of the commendable results and the forward looking statement of the Directors, we are revising our forecasted EPS upwards to $3.30. At this revised forecast and the current price, this share is trading at a multiple of 14.84 times. At the forecasted EPS of $3.30 and using a multiple of 15, we have estimated a Target Price of $49.50 for this share. Thus, at this time we continue to recommend a HOLD on this share.

Gia Singh
WISE Equity Research Team