NTPM
reported a weaker FY17 net profit at RM49.9m (-13.5% YoY), which only
met 88% of our full year estimates, despite the higher revenue matching
our forecasts. FY17 revenue was RM645.3m, up 7.2% YoY. On quarterly
basis, NTPM’s 4QFY17 results was sluggish. Though 4QFY17 revenue (+10.1%
YoY), operating profit (+8.4% YoY), and pretax profit (+8.4% YoY)
showed positive growth YoY, net profit was lower by 10.9% YoY on higher
effective tax rate. Operating margin, pretax margin and net margin each
declined between 3-5% YoY. We trim our earnings estimates for FY18-19F
by 5% to 12% on the back of higher manufacturing costs and hence, we
revise down our TP to RM0.71, based on 14x our FY18F EPS of 5.1sen. Our
Neutral call is maintained. The Group declared a final dividend of
0.80sen per share, bringing total dividend per share for FY17 to
2.40sen, higher than FY16’s 1.6sen per share.
Source: PublicInvest Research - 30 Jun 2017
- Paper products segment saw improvement in revenue by 7.5% YoY to RM108.3m for 4QFY17, while FY17 revenue also rose to RM445.4m (+7.1% YoY). 4QFY17 PBT declined 15.1% YoY to RM8.0m, while FY17 PBT was 16.2% lower YoY. PBT margin for the segment decreased to 11.9% in FY17 from 15.3% in FY16. Weaker performance in this segment was attributed to higher raw material prices, as well as higher labour cost, repair and maintenance, energy cost and deficit on revaluation.
- Personal care products’ 4QFY17 revenue jumped 16.0% YoY to RM50.9m, on the back of better diapers sales. The segment’s FY17 revenue was RM199.9m (+7.6% YoY). 4QFY17 PBT grew 30.1% YoY to RM19.2m, with stronger FY17 PBT margin at 9.6% compared to FY16’s 7.9%.
- Headwinds including cautious and prudent consumer spending trend due to factors such as inflationary pressures and higher cost of living is expected to continue affecting NTPM. Going forward, higher labour and utilities costs remain key issues for NTPM to manage, in controlling its overall operating costs. We believe the Group will continue identifying cost-saving projects to drive operational efficiencies, while also looking at developing new products, strengthening customer base and improving distribution channels.
Source: PublicInvest Research - 30 Jun 2017
http://klse.i3investor.com/blogs/PublicInvest/126426.jsp
