Power Root’s FY19 earnings to come in within expectations

KShUarAonLKAong LUMPUR: Power Root Bhd’s (Power Root) financial year 2019 (FY19) earnings has been KUCHING: Power Root anticipated by the research Bhd’s (Power Root) financial arm of Kenanga Investment year 2019 (FY19) earnings Bank Bhd’s (Kenanga has been anticipated by the Research to come within its research arm of Kenanga and consensus expectations, Investment Bank Bhd’s at circa RM29 million to (Kenanga Research to come RM33 million. within its and consensus

Kenanga Research’s expectations, at circa RM29 and consensus’ full-year million to RM33 million. estimates for Power Root

Kenanga Research’s were RM30.9 million and consensus’ full-year and RM30.5 million, estimates for Power Root repsectively. were RM30.9 million

“In the upcoming fourth and RM30.5 million, quarter of 2019 (4Q19) repsectively. results, we anticipate core

“In the upcoming fourth profits to amount at RM7 quarter of 2019 (4Q19) million to RM12 million, results, we anticipate core from RM6.5 million in 3Q19,” profits to amount at RM7 the research arm projected.

“Earnings expansion could be translated from the materialisation of the group’s rationalisation of its distributor and client profile, but could bring about impairments or provisions, better commodities (mainly coffee) prices and cost savings from various operational streamlining exercises.”

The research arm noted that 4Q18 core results registered at RM0.4 million, as the period was bogged by poor sales environment and highly suppressed margins.

“On a full-year FY19 basis, this would translate to core net earnings to range between RM29 million to RM33 million, up 23 per cent to 40 per cent year on year (y-o-y).

“This is within our and consensus full-year estimates of RM30.9 million and RM30.5

(up 32 per cent y-o-y), respectively.” core net earnings to range between RM29 million to RM33 million, up 23 per cent to 40 per cent year on year (y-o-y).

“This is within our and consensus full-year estimates of RM30.9 million and RM30.5 million (up 32 per cent y-o-y), respectively.”

However, Kenanga Research anticipated sales could come off at RM357.1 million (down 16 per cent) owing to the above.

With a 5.1 sen dividend paid year to date (YTD), the research arm also anticipated a lumpier 4Q19 payment to arrive close to its FY19E’s 7.5 sen expectation, slightly below a 100 per cent payout.