YTL Power International : 1QFY09 : Within expectations
• Results within house forecasts
YTLP reported 1Q09 top and bottomline of RM1.05bn and RM180.4m respectively. The group’s revenue came in 1.1% higher y-o-y (-8.0% q-oq). Though revenue came in slightly stronger y-o-y, it recorded a lower net
profit due to a provision made by the group for the windfall tax payment due to the government by its power generation subsidiary. This blip aside, earnings came in within expectations on an annualised basis.
• Windfall tax provided for
The impact of the windfall tax is no longer an issue for the company, as it would now only have to make a one-off payment to the government and there would be no renegotiations of its power purchase agreement (PPA) with Tenaga. No numbers were revealed, with regards to the windfall tax payment, but we estimate it to be in the regions of about RM90m.
• Maintain TP and BUY call
With gross dividend yields at 7% given current market prices, YTL Power is certainly a defensive haven in prevailing market conditions, more so with uncertainties over the stock recently removed with the imposition of the one-off windfall tax payment. Our BUY call and TP is reaffirmed.