Jutha Maritime – JUTHA - BUY
Target price : Bt4.50
Recommendation : BUY
Closing Price (15 May 09) : Bt3.76
- JUTHA racked up revenue growth of 8.84% YoY though average freight rates fell to US$7,000 per vessel per day from US$8,500 per vessel per day. The dry-docking of a vessel took 32 days off vessel operating days. Liner freight rates also dropped. The addition of a new vessel to its fleet,
taking the total to seven however helped keep revenue growing.
- Costs climbed up on the back of a new vessel and dry-docking expenses. In this quarter, JUTHA booked a FX loss against a year-ago gain. Net profit for the quarter therefore sank 86.85% YoY to Bt6.53m. Stripping out the FX effect, the profit figure was down 32.97% to Bt22.26m.
- We retain our 2009 forecast for profit before FX at Bt109.97m. The first-quarter profit accounted for 20.24% of our full-year estimate. There will be another new ship to be added to its fleet in Sep. Revenue and profit should accordingly perform better. We keep a BUY call on JUTHA. Our price target is unchanged at Bt4.50/share, based on a P/E of 3.5x.
1Q09 net profit down 86.85% YoY on FX loss
JUTHA, the smallest SET-listed handy-sized dry cargo ship operator generated revenues of Bt173.08m in 1Q09, up 8.84% YoY. In this quarter, average freight rates fell to US$7,000 per vessel per day from a year-ago level of US$8,500 per vessel per day as liner freight rates dropped, and the off-hire of a vessel for dry-docking took 32 days off vessel operating days. The addition of a new vessel to its fleet, taking the total to seven however helped keep revenue growing. Costs jumped 23.07% on the back of higher dry-docking expenses and a new vessel. SG&A expenses edged marginally down 0.87%. Financial costs rose 6.21% on loans for a new vessel. In this quarter, JUTHA booked a FX loss of Bt15.73m, against a year-ago gain of Bt16.44m. In sum, JUTHA reported a net profit of Bt6.53m in 1Q09. The results were 86.85% below the Bt49.65m it posted in the same quarter in 2008. Stripping out the FX effect, the first-quarter profit figure came in at Bt22.26m, down 32.97% from the Bt33.21m it made in the same quarter of last year.
2009 forecast for profit before FX unchanged at Bt109.97m
The first-quarter profit before FX accounted for 20.24% of our full-year forecast of Bt109.97m. We keep our estimates unchanged for the time being. There will be a newly built vessel to be added to its fleet in Sep 2009 and earnings should according perform better. As the shipping industry appears to have already hit bottom, freight rates should gradually recover. FX loss may turn into gain on the back of the baht's strength. Currently, JUTHA has US dollar-denominated loans of US$28m. Our price target is unchanged at Bt4.50/share, based on a P/E of 3.5x. We keep a BUY call on JUTHA.
By Phillip Securities (Thailand) Plc. on May 18, 2009
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