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R e su l ts N o t e
1 July 2010
MARKET DATELINE
♦ Weaker net profit yoy due to power and NFO. 1Q EBIT rose 31.8% Issued Capital (m shares) 403.3
qoq largely due stronger contribution from: 1) NFO (+144% qoq), as a Market Cap (RMm) 7,032.8
result of lower prize payout (estimated 1QFY11: 65% vs. 4QFY10: 72%); Daily Trading Vol (m shs) 0.4
and 2) leisure division (1QFY11: RM9.2m vs. 4QFY10 operating loss of 52wk Price Range (RM) 13.30-19.12
RM12.9m) as 1Q tends to be a seasonally stronger period for Tropical Major Shareholders: (%)
Islands. Together with lower finance cost (-29.5% qoq), 1QFY11 net profit Tan Sri Ananda Krishnan 30.9
jumped 54% qoq (core basis). YoY, net profit fell 7.4% mainly due to: 1) Capital Group 11.0
lower EBIT from the power division (-10% yoy) stemming from weaker
US$ vs. RM (-9% yoy); and 2) lower EBIT from the NFO division (-19%
yoy) due to weaker average sales/draw (-9% yoy due to common draw FYE Jan FY11 FY12 FY13
days for special draws this year) and poorer luck factor (1QFY10 prize EPS chg (%) - - -
payout: 61.6%). As for the RTO segment, operating losses were roughly Var to Cons (%) (0.1) (0.8) (4.5)
total of RM50m has been budgeted for this. Further out, the next leg of
Tanjong plc
growth for the power division would depend on adding new power assets.
Tanjong targets to double its generating capacity to 8,000MW over the
next five years through a combination of greenfield developments and M&A
activities. As for the gaming division, the group is actively engaging with
the turf clubs, Malaysian Totalisator Board and Ministry of Finance to FBM KLCI
resolve the operating losses posted by the RTO division (FY10: RM65.8m).
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EBITDA 416 306 379 24 (9) Weaker yoy due to the power and NFO segments while qoq
improvement mainly due to stronger contribution from NFO and
seasonally stronger results from leisure.
Depreciation (77) (74) (74) (1) (4)
Inv & int income 1 1 (3) >100 >100
Interest expense (85) (110) (78) (29) (8) Total borrowings as at end-1QFY11 fell further to RM4.8bn vs.
RM5.2bn at end-4QFY10 and RM5.9bn at end-1QFY10.
Associates 15 24 19 (21) 21
Exceptionals 0 22 0 (100) nm Mainly relates to revaluation gain on Menara Maxis.
Pre-tax profit 269 169 242 44 (10)
Tax (53) (41) (49) 20 (8)
Minority interest (25) (2) (16) >100 (35)
Net profit 191 126 177 41 (7)
Core net profit 191 115 177 54 (7) 4QFY10 core net profit adjusted for net revaluation gain on Menara
Maxis.
Margins (%)
EBITDA 31.7 23.9 30.0
Pre-tax 20.6 13.2 19.2
Effective tax rate 19.7 24.2 20.2 Lower than Malaysian statutory tax rate due to tax-exempt income
from foreign operations.
Core PATMI 14.6 9.0 14.0
Segmental revenue
Power 693 695 666 (4) (4) Lower yoy due to combination of lower energy billings from the
Malaysian power plants and strengthening of RM (vs. US$).
Gaming 530 488 501 3 (5) NFO revenue lower yoy due to weaker blended NFO sales/draw (-
8.9% yoy), partly cushioned by two extra draw days. QoQ higher
mainly due to higher blended NFO sales/draw (+2.6% qoq).
Property investment 13 14 14 (2) 8
Leisure 74 81 83 2 12 Higher yoy mainly due to: 1) stronger contribution from Tropical
Island (visitor arrivals -1.2% yoy to 2,717, offset by higher ARPU
of €37.3 vs. €34.8 in 1Q10); and 2) higher contribution from TGV
(RM42m vs. 1Q10: RM33m).
Total 1,310 1,279 1,265 (1) (3)
Segmental results
Power 265 238 238 0 (10) Lower yoy due to strengthening of RM (vs. US$) and warranty
claim of RM10m in 1QFY10.
Gaming 62 7 47 >100 (24) Lower yoy due to higher NFO prize payout (1QFY11: 65% vs.
1QFY10: 61.6%). QoQ improvement largely due to lower prize
payout (4QFY10: 72%).
Property investment 11 9 14 46 24
Leisure 1 (13) 9 >100 >100 Tropical Island was EBIT positive in 1QFY11 while contribution from
TGV rose further to RM5.1m (1QFY10 EBIT: RM1.8m). QoQ
improvement largely reflects seasonality for TI.
Others (1) (10) (4) (64) >100
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Other assets:
Tropical Island (BV less losses) 70.0 0.17
TGV @ BV 70.2 0.17
Menara Maxis @ BV 672.0 1.67
Taweelah B (10%) - Equity value of US$3bn cost 204.0 0.51
Less: Net debt (excl debt arising from acquisitions) 271.1 0.67
Total revalued NAV (RMm) 7,738.8 19.19
Share cap (m) 403.3
Source: RHBRI estimates
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Stock Ratings
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Trading Buy = Short-term positive development on the stock that could lead to a re-rating in the share price and translate into an absolute return of 15% or more
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Industry/Sector Ratings
Overweight = Industry expected to outperform the FBM KLCI benchmark, weighted by market capitalisation, over the next 6-12 months.
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