An aerial view of Bintulu Port.
PETALING JAYA: Higher operating and tax expenses negatively impacted Bintulu Port Holdings Bhd
’s (BPHB)) earnings in the nine months ended Sept 30 (9M24), leading analysts to revise their projections for the company.
Kenanga Research cut its earnings projections for the port operator’s financial year 2024 (FY24) and FY25 by 7% and 9%, respectively, after it reported a weak third quarter (3Q) performance for FY24.
The research house also reduced its target price by 5.3% to RM6.20 a share (from RM6.55) ,but maintained its “market perform” call on the counter.
The research house also cut its dividend expectations from the company for FY24 to 14 sen a share from 17.2 sen earlier after taking into consideration the 10 sen per share dividend announced over 9M24.
“BPHB’s 9M24 core net profit came in below expectations at 70% of both our and consensus full-year estimates. The key variance against our forecast came from the higher-than-expected operating and tax expenses.
“Nonetheless, its 9M24 core net profit remained strong, rising 38% year-on-year (y-o-y) driven by strong cargo volumes and lower total finance costs and taxes,” Kenanga Research said in a recent report on the Bintulu-based company.
For the 3Q24, BPHB’s revenue was driven by the increase in activity at it two ports – Bintulu Port (up 3%) due to higher LNG demand on re-stocking activity before the winter season and Samalaju Industrial Port (up 1%) on higher cargo volumes from key customers such as Press Metal Aluminium Holdings Bhd and OM Holdings Ltd (OMH).
Its core net profit for the quarter, however, fell by 31% on higher operating expenses and a higher effective tax rate at 30.9% compared with 24.2% in 2Q24 due to certain expenses not claimable for tax.
“The port operator’s supply-base service contract is expected to incur higher operating costs for the next two to three years as it ramps up its service offerings concurrent with oil and gas exploration projects and it has to undertake major repair and maintenance services until a new concession is finalised,” Kenanga Research said.
The research house noted BPHB’s outlook remained favourable as cargo throughput of liquefied natural gas (LNG) is forecast to remain stable with sustained demand from key markets like Japan, South Korea and China.
Bintulu Port has set a target of 10% of total revenue coming from the handling of green energy by 2028, with the balance from LNG (40%) and non-LNG (50%). At present, the group’s revenue mix is evenly split between LNG and non-LNG.
There is also a pick-up in bulk-cargo volumes at Samalaju Industrial Port from clients like Press Metal and OMH.
BPHB is also expected to soon commence handling of marine services for Sarawak Petchem Sdn Bhd’s methanol division from December this year, the research house added.
