Price (Bt) 20.30
Target (Bt) 15.90
Set Index 533.92
2Q08/09 worse than expected with Bt138mn loss
2Q08/09 result worst due to lower TC rates with higher expenses
TTA posted a 2Q08/09 (Jan – Mar 2009) normalised loss of Bt138mn (Bt0.21/share) and worst-than-
expected. The company booked forex gains of Bt122mn, a gain from the buyback of convertible debentures of Bt131mn and a loss on the sale of 2-vessels of -Bt16mn for a total gain of Bt237mn in extra items.
Including these extra items, the net profit was Bt99mn (Bt0.15/share), a drop of 89% qoq. Earnings were
mainly due the lower utilisation with an average TC rate down 10% qoq Furthermore, owner expenses were up 5.2% qoq due to dry-docking expenses. Offshore business contributed a loss to TTA due the monsoon affecting sub-sea engineering projects. The TTA S.G.& A. expenses rose 13% qoq. Therefore, operating margins fell to a negative -4% from 5% last quarter and 24% in 2Q07/08.
TTA has generated a 1H08/09 (Sep 08 – Mar 09) normalised profit of Bt185mn (Bt0.29/share), down a
dismal 95% yoy and accounting for 31% of our full-year forecast. The net profit of Bt996mn (Bt1.55/share)
has dropped 76% yoy. The company has already announced no interim dividend for this period.
Time charters continuing to climb, 3Q09 expected to recover
The Baltic Dry Index (BDI) continues to move up stronger than expected. It has jumped 70% in a
month to close at 2,544 points. The Supramax charter rate has climbed to more than US$18,000 per day and
over the TTA breakeven point of US$8,000 per day. Therefore, we expect to see the quarterly TC rate
recover. Moreover, owner expenses are trending to decrease after the sell of 4 older vessels. The
utilisation rate for the sub-sea business is now comes back to more than 70%.
Share price now looks expensive, maintain SELL
We believe the TTA result has bottomed out and the trend will be to recover in the next quarter.
However, the new fleet vessels are coming into the market late this year and next year and that will
depress the market charter rates over the long-term. The current share price is now very expensive as it is
trading on 2009 and 2010 norm. PER of 24.3x and 7.7x, respectively. This is far too high when compared with
the average 3-year norm. PER of 4.8x. Hence, we are reiterating our TAKE PROFIT on TTA.
Earnings summary
Year End Sep 30 2005/06 2006/07 2007/08 2008/09F 2009/10F
Sales (Btmn) 15,574 19,891 33,712 17,641 18,036
EBITDA (Btmn) 5,347 6,911 11,509 3,898 5,392
Normalised earnings (Btmn) 2,649 4,239 8,337 591 1,878
Earnings (Btmn) 3,502 4,962 8,776 1,305 1,878
Norm. EPS (Bt) 4.12 6.58 12.95 0.83 2.65
EPS 5.44 7.71 13.63 1.84 2.65
Norm. PER (x) 4.9 3.1 1.6 24.3 7.7
EV/EBITDA (x) 3.8 2.6 0.8 3.2 2.1
Cash flow (Btmn) 5,116 6,743 10,827 3,547 4,302
CF/share (Bt) 7.4 11.6 18.4 5.6 6.1
BVPS (Bt) 17.4 23.5 38.9 34.5 36.7
P/BV (x) 1.2 0.9 0.5 0.6 0.6
DPS (Bt) 1.35 1.65 2.85 0.46 0.66
Dividend yield (%) 6.70% 8.10% 14.00% 2.30% 3.30%
Net debt/equity (X) 0.7 cash cash cash cash
ROA (%) 16% 19% 25% 3% 5%
ROE (%) 35% 38% 44% 5% 7%
Gross Margin (%) 27% 30% 30% 12% 20%
Source : Company reports and KELIVE Research estimates.
By Kim Eng Securities (Thailand) Company Limited on May 18, 2009
USA Top Cities
Charlotte North Carolina ,Houston Texas ,El Paso Texas ,Garland Texas,Stockton California,Akron Ohio,Toledo Ohio,Bakersfield California,Honolulu Hawaii,Raleigh North Carolina ,Minneapolis Minnesota,Washington District of Columbia,Durham North Carolina ,Birmingham Alabama,Austin Texas,Wichita Kansas ,St. Paul Minnesota ,Omaha Nebraska,Orlando Florida,Las Vegas Nevada ,Indianapolis Indiana,Chicago Illinois ,Chesapeake Virginia,Oyster Bay New York,Tucson Arizona,Riverside California,Tulsa Oklahoma,North Hempstead New York,Phoenix Arizona ,Memphis Tennessee,Virginia Beach Virginia ,Chandler Arizona,Los Angeles California,Fort Wayne Indiana ,Tampa Florida,Greensboro North Carolina ,Lubbock Texas,Nashville-Davidson Tennessee,St. Louis Missouri ,Corpus Christi Texas ,Long Beach California ,Lexington-Fayette Kentucky,Dallas Texas ,Baton Rouge Louisiana ,Rochester New York ,Milwaukee Wisconsin,Portland Oregon ,San Francisco California ,Denver Colorado,Miami Florida,Philadelphia Pennsylvania ,Cleveland Ohio,Fort Worth Texas ,Modesto California,Madison Wisconsin,Cincinnati Ohio,Oakland California,San Diego ,Columbus Ohio,Arlington Texas ,New Orleans Louisiana ,Laredo Texas,Plano Texas,Lincoln Nebraska,Kansas City Missouri ,Babylon New York ,Sacramento California,Chula Vista California ,Jersey City New Jersey,Boston Massachusetts,Henderson Nevada,Anchorage Alaska,Jacksonville Florida,Reno Nevada,Oklahoma City Oklahoma ,Glendale Arizona,St. Petersburg Florida ,Fresno California,Aurora Colorado,Norfolk Virginia,Newark New Jersey ,Albuquerque New Mexico ,Scottsdale Arizona,Detroit Michigan,Pittsburgh Pennsylvania,Colorado Springs Colorado ,Mesa Arizona,Hialeah Florida,San Antonio Texas,Hempstead New York ,Atlanta Georgia,San Jose California ,Santa Ana California ,Islip New York ,Seattle Washington,Anaheim California,Brookhaven New York ,New York New york,Buffalo New York ,Baltimore Maryland
