AKR
Corporindo (AKRA IJ; NEUTRAL; TP IDR 4.300) 1H12 Results Review: Unexciting
Results
Lower-than-expected. AKRA’s 1H12 results were slightly
below our and consensus estimates. Its 1H12 core profit grew 23% y-o-y to
IDR298bn on the back of IDR10.7trn revenue (+18%y-o-y) and better profitability
overall, except in its logistics and coal businesses. Operating margin increased
by 40bps q-o-q in 2Q12 to 6%. Trading and distribution contributed 93.5% of the
company’s total revenue in 1H12, with 79% of it derived from petroleum and 14%
from basic chemical distribution.
Weaker petroleum sales volume.
Petroleum revenue
grew by 18% y-o-y to IDR8.5trn, mainly driven by higher ASP of IDR8,005/litre
(+11% y-o-y) as of 1H12. But in terms of sales volume, its 1H12 petroleum sales
volume of 1.1m kilolitre (KL) only accounted for 44% of our FY12f target of 2.4m
KL vs 1H11 sales volume of 997k KL comprising 49% of FY11 volume of 2m
KL.
Within target basic chemical business.
This second largest
contributor to AKRA’s revenue posted 23% y-o-y revenue growth to IDR1.5trn,
mainly driven by higher ASPs of IDR2,333/MT (+16% y-o-y). We deem the
volume of 648k tonnes within target, as it accounts for 48% of our FY12 target
of 1.3m tonnes (1H11: 611k, 49% of FY11 volume).
Still underperforming.
Revenue from logistic
services dropped 11% to IDR221bn, with margin significantly squeezed to 17.7% in
1H12, down from the 24.8% registered over the same period last year. On a
quarterly basis, the company’s coal revenue grew by 17% qo-q to IDR81bn in 1H12,
although the segment is still posting losses.
Neutral with TP of IDR4,300.
While we are
maintaining our forecasts, we are revising our recommendation to Neutral. We are
unsured whether AKRA’s petroleum volume sales will accelerate in subsequent
quarters, given the downturn in the coal industry which has resulted in the
majority of heavy equipment companies reducing their unit sales targets
for
FY12. Note that over 70% of the
company’s unsubsidized fuel sales volume goes to the coal mining/energy-related
sector. The counter is currently trading at a lofty valuation of 20.5-17.1x
FY12-13f PE
source:
OSK Nusadana Indonesia Equity Research
Team
