Tanjong Plc 3QFY09: Within expectations
· Results within expectations
Results came in mixed with overall improvement in topline but bottomline coming in lower y-o-y and q-o-q. Revenue was also boosted by contributions totalling RM176m from Globeleq power plants which were acquired in November 2007, and increases in energy billings for the quarter.
· Windfall tax crimp margins
3QFY09 group PBT fell by RM100m y-o-y due mainly to the RM55m charge relating to the windfall levy of which it had accelerated and made full provisions for as against the monthly basis previously, and a reduced contribution from the gaming segment arising from fewer draws and an increase in the NFO prize payout ratio from 62% to 66% in the current quarter.
· Power – Globeleq continues to impact revenue
YTD, power generation accounts for 75% of Group revenue and 79% of total operating profit. Results include full consolidation from Globeleq which contributed RM520m to group revenue. However, operating profit for the segment only increased by RM28m due to the aggregated RM62m windfall levy charge, and business an corporate development costs totalling RM42m.
· Gaming – lower sales but improved payout ratio
YTD, gaming accounts for 20% of group total operating profit. Sales proceeds from the NFO business dropped marginally by 4% y-o-y due to lesser draws conducted in the current period. However, this was offset by a slight improvement in the overall NFO prize payout ratio, resulting in operating profit reducing by only RM3m.
· Leisure – Higher contribution from Tropical Island
Tropical Islands recorded improved attendances, resulting in a 52% revenue increase and a reduction in its losses from RM38m to RM13m in the current period. This segment also recorded a RM29m contribution form TGV Cinemas Sdn Bhd, which became a wholly-owned subsidiary at
the end of July this year.
· 17.5 sen interim dividend declared
A third interim gross dividend of 17.5sen has been declared, bringing the total gross dividend paid to date to 52.5 sen, giving a YTD yield of 3.9%.
· Maintain Buy call and TP
The group looks set to meet our FY09 targets. As such we have maintained our FY09 and FY10 forecasts and our call and TP on the stock.