Malakoff now penny stock again after weak results

Malakoff, which is an independent power producer with the largest capacity in Southeast Asia, announced to Bursa Malaysia its indirect unit Win Macarthur Finco Pty Ltd (WMFPL) had drawn down the amount for the existing term loan.

KUALA LUMPUR: Independent power producer Malakoff Bhd saw its shares falling early Friday after its net profit came in below expectations.

At 9.55am, it was down seven sen to 96 sen with 5.72 million shares done. It hit a low of 82.5 sen on June 29.

The FBM KLCI was down 10.27 points or 0.57% to 1,800.60 on profit taking. Turnover was 443.32 million shares valued at RM255.77mil. There were 154  gainers, 368 losers and  286 counters unchanged. 

Maybank Investment Bank Research said Malakoff’s 2Q18 net profit of RM53mil (-49% on-year, -1% on-quarter) brought the first half of FY18 net profit to RM105mil (-48% on-year), 38%/39% of its/consensus full-year forecasts. 

“The miss relative to our forecasts, was due to 1) higher than expected taxes (62% effective tax rate in 2Q18) and 2) lower-than-expected associate contribution,” it said.

Maybank Research lowered its FY18/19/20 net profit forecasts by 14%/13%/16% respectively as it incorporated the latest run-rates for taxes and associate income. 

“With our EBITDA forecasts unchanged, our TP is lowered marginally to RM1.13 (from RM10.15). We expect management to maintain a 100% payout ratio for FY18. Our TP is based on a sum-of-parts, with each entity valued on a DCF (assuming 7.2% WACC for the Malaysia power plants),” it said.

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