Bintulu Port’s 1Q17 results broadly within expectations

KUCHING: The first quarter results of 2017 (1Q17) for Bintulu Port Holdings Bhd’s (Bintulu Port) have been viewed by analysts as mostly positive and broadly within expectations.

In a filing on Bursa Malaysia, Bintulu Port announced a profit before taxation amounting to RM67.98 million in the current quarter ended March 31, 2017 against RM54.07 million achieved in the preceding year corresponding quarter.

Coming in at 34 per cent of its financial year 2017 estimate ( FY17E) forecast, the research arm of Kenanga Investment Bank Bhd ( Kenanga Research) deemed Bintulu Port’s 1Q17 net profit of RM50.6 million to be broadly within expectations.

This is because Kenanga Research expected a weaker second half of 2017 (2H17), factoring in potential losses arising from Samalaju Port’s initial gestation phase, which is set to commence its full operations in June 2017.

The announced interim dividend of six sen per share was also within the research arm’s expectation.

On to the upcoming Samalaju Port, Kenanga Research noted that it is expected to commence full operations in June 2017.

“We expect this to be a longerterm prospect, positioned to ride on the development of the Sarawak Corridor Renewal Energy ( SCORE),” Kenanga Research said.

Having said that, the research arm expected Samalaju to undergo losses initially, dragged down by fixed depreciation and amortisation costs, with the port expected to achieve meaningful utilisations only in two to three years’ time.

On another note, secured contracts in FY16 to offer base support services are expected to provide some visibility towards its non- cargo revenue for the next three to five years, while Petroliam Nasional Bhd’s ( Petronas) new LNG Train 9 is also set to increase yearly liquefied natural gas (LNG) production capacity to 29.3 million tonnes.

Despite this set of positive results, Kenanga Research kept its forecasts mostly unchanged, as the research arm expected 2H17 to be weaker once losses from Samalaju Port are factored in.

Post-model update, the research arm tweaked its FY17-18E earnings forecast only marginally by an increase of 0.1-1 per cent for housekeeping purposes.

Kenanga Research lowered its target price to RM6.60 per share, from RM6.78 per share previously.

Fol lowing that, Kenanga Research downgraded its call to ‘market perform’, with Bintulu Port showing no immediate signs of any earnings growth catalysts in the near-tomid-term at this juncture.