Nov 2007 Financial News

PLIPDECO Releases Nine Months Results

Nov 19, 2007

Point Lisas Industrial Port Development Corporation Limited (PLIPDECO)
Results for the Nine Months Ended September 30, 2007

For the Nine Months Ended September 30, 2007, Point Lisas Industrial Port Development Corporation Limited (PLIPDECO) reported Earnings Per Share (EPS) of $1.37, up an outstanding 204.44 per cent or 92 cents on the corresponding EPS in fiscal 2006. However, while the increase is significant, it is important to note that $1.05 of the $1.37 came from Unrealized Fair Value Gains. If we exclude these unrealized gains, the EPS from core earnings would be up 14.29 per cent or 4 cents on NM06.

Turnover for the Nine Month period amounted to $174.44 million, up 15.09 per cent or $22.87 million on the same period in FY06. Q307 on Q306, this figure was up 7.63 per cent from $53.72 million to $57.82 million. The Chairman has attributed the improvement in Turnover to an increase Port revenue due to higher container throughput and general cargo handled at the Port of Point Lisas. Unrealized Fair Value Gains for the period under review stood at $41.77 million, up a significant 513.74 per cent or $34.96 million on the same period in FY06. Additionally, Q307 on Q306, Unrealized Fair Value Gains was up substantially from $0.005 million to $5.85 million. Thus, Operating Profit ended the Nine Months at $72.90 million, up by a considerable 107.85 per cent or $37.83 million.

For NM07, Net Investment Income totaled $5.88 million, up 19.70 per cent or $0.97 million from $4.91 million in NM06. Q307 on Q306, this figure was up $1.71 million from $0.01 million to $1.80 million. Finance Costs ended at $19.89 million for NM07 compared to $18.51 million in NM06, an increase of 7.42 per cent. As such, Profit Before Taxation amounted to $58.89 million, up a substantial 174.30 per cent or $37.42 million.

The Effective Tax Rate for the period under review was 7.82 per cent compared to a Tax Rate of 16.65 per cent for the corresponding period in the last financial year. Thus, Profit After Taxation for NM07 was $54.29 million, up 203.35 per cent or $36.39 million on the comparable period in FY06.

The shares of PLIPDECO are currently trading at a price of $8.08. We are maintaining our forecasted EPS of $4.10 for FY07. At this forecast and the current price, this share is trading at an extremely low multiple of 1.97 times. However, it should be noted that a significant amount of the profit of this Company results from unrealized gains. If we use a Forecasted EPS of $0.42 based on core earnings, this share is trading at 19.24 times at the current price which is high for this Company. Thus, at this time we recommend a SELL on this share.


Gia Singh
WISE Equity Research Team