Bintulu Port Holdings- Hit by one-off

Price: RM6.10
Target Price: RM6.75
Recommendation: BUY

· 1H09 net profit of RM67.5m was slightly below expectations at 47.8% and 46.6% of our forecast and street’s estimate respectively. Lower result was mainly due to one-off lease payment in 2Q09. As expected, group announced an interim single tier dividend of 7.5sen.

· QoQ, 2Q09 revenue declined 11.2% on lower cargo volume across all segments. We however take comfort that 1H09 LNG volume fell by only 3.7% yoy while other cargoes such as dry bulk, break bulk and container tumbled 23%-31% yoy. Pre-tax unexpectedly dived 58.5% due to the one-off lease payment (c.RM10m) which is not expected to recur in the subsequent quarters.

· YoY, 1H09 turnover dropped 4.1% to RM219.0m on lower volume handled. While port volumes fell, Biport Bulkers’ palm oil intake continued to increase as sales surged 79% to RM7.9m. Group’s pre-tax shrank 20.9%, owning to the one-off, reduced port volumes and lower interest income.

· Adjusting our FY09 forecast downwards by 7.6% to account for the one-off lease payment. Our FY10 net profit forecast is 1.7% lower after model refinements. Maintain BUY recommendation with unchanged target price of RM6.75. Yield is decent at 6.3%.