YTL Cement : 1QFY09 : Within expectations
• Within expectations.
1QFY09 results came in within house and market expectations. Net profit of RM69.2m was 3.2% and 1.8% above house and consensus estimates on an annualised basis. A net interim dividend of 4.625 sen was declared which was made up of a 3% gross dividend, less 25% tax, and a 7% single-tier net dividend for each 50 sen share.
• Revenue +42.9% y-o-y, net profit +34.6% y-o-y.
The better performance was mainly due to higher average selling prices since the liberalisation of the cement industry in June 2008. Contributions from overseas operations as well as improved operational efficiencies
also boosted the revenue and profits for the current quarter. Going forward, despite the removal of cement import duty recently, we do not expect domestic cement price to adjust downwards significantly as it is
already at competitive levels vis-à-vis regional prices. The recent RM7bn fiscal stimulus under the government’s economic stabilisation plan is positive for the cement sector as RM4.1bn of the allocation will go towards infrastructure expenditure such as schools and roads.
• Maintain BUY call and target price of RM4.50.