Towards Financial Freedom
Jaya - Good News First, Or The Bad?
Jaya's FY13 results surprised owing to USD17.6m in net one-offs, excluding which its core earnings of USD28.4m were in line, just 3% shy of our prior USD29.3m forecast. The 3.5 cent dividend is a new positive but vessel disposals and further delays may hurt near-term growth. As its shares have fallen 14% since we initiated coverage three months ago, upgrade to NEUTRAL, with SGD0.61 TP.
- Exceptionally-high utilisation buoys returns. 4QFY13 was a bumper quarter, with fleet utilisation at a record 91% while charter revenue came in at USD29.8m and gross margin at 40%. The USD24.7m in pretax income can be split into USD17.2m from one-off gains and losses, and core earnings of USD7.5m (See Figures 1 and 2 for details).
- High dividend reminiscent of 2011-2012 Vard Holdings. The 3.5 cent dividend is a positive, but we see a direct parallel in Vard Holdings (VARD SP; BUY; TP SGD1.10), which had paid out a higher than normal dividend while its major shareholder(s) looked to exit the company. To be fair, this dividend should be sustained by Jaya's recurring earnings, although the payout ratio appears high.
Source: OSK
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This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
