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Robinson
Department Store
ROBINS <Bt2.34>
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Recommendation
New : LONG-TERM
BUY
Previous : BUY
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Earnings
downgrade due to lower-than-expected results
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Robinson Department Store
(ROBINS) announced lower-than-expected results of Bt75mn in
4Q02 due to slow growth of sales. However, 2002 normalised
profit came in at Bt384mn, against a loss of Bt446mn in
2001.
After the implementation of
its rehabilitation plan, ROBINS’ performance has improved
significantly, posting positive normalised profit for five
successive quarters. Interest expenses dropped sharply,
while shareholder’s equity turned to positive and retained
loss declined to Bt303mn. A key point is that ROBINS
generated operating cash flow last year of Bt704mn, or
Bt0.63/share.
However, we’ve revised down
our earnings forecast of ROBINS to reflect slower growth
prospects. We’ve also downgraded our fair value estimate
to Bt3.0 based on 2003 PER of 8.0x and rate the stock as LONG-TERM
BUY.
ROBINS
earnings summary
|
As of |
Net
Profit |
Growth |
EPS |
PER |
EV/EBITDA |
P/BV |
P/SALES |
ROE |
|
Dec. |
(Bt
mn) |
% |
(Bt) |
(x) |
(x) |
(x) |
(x) |
% |
|
1999 |
(5,591) |
N.A. |
(37.76) |
N.A. |
18.37 |
N.A. |
0.05 |
N.A. |
|
2000 |
(7,030) |
N.A. |
(47.47) |
N.A. |
13.76 |
N.A. |
0.05 |
N.A. |
|
2001 |
(791) |
N.A. |
(5.34) |
N.A. |
N.A. |
N.A. |
0.04 |
N.A. |
|
2002 |
15,178 |
N.A. |
46.94 |
0.05 |
N.A. |
0.60 |
0.09 |
N.A. |
|
2003F |
421 |
(97%) |
0.38 |
6.17 |
1.22 |
1.64 |
0.31 |
29.56% |
|
2004F |
458 |
9% |
0.41 |
5.68 |
0.70 |
1.33 |
0.29 |
32.72% |
Source : Kim Eng Research
- ROBINS posted normalised
profit of Bt74mn in 4Q02, up 26% qoq and 29% yoy. Earnings
growth was primarily supported by the sharp decline in
interest expenses, while we were disappointed that sales
didn't increase significantly despite the rise in consumer
spending and economic recovery.
Interest expense fell by 97%
on the back of ROBIN's successful rehabilitation plan
through debt repayment, a swap of debt into equity, capital
increase, capital decrease and debt forgiveness. Also, part
of ROBIN's interest expenses were pre-booked as debt which
will be repaid with the debenture.
We were quite disappointed to
see 2002 sales increase only 1% yoy to Bt7,615mn. We assume
this is due to the increase in competition from other
department stores and discount stores.
ROBINS' net debt-to-equity
ratio stood at 1.63x at the end of 2002 compared with
negative equity of Bt15,499mn in 2001. Retained losses
decreased dramatically from Bt19,263mn to only Bt306mn.
ROBINS 4Q02
results
|
Income
statement (Bt mn) |
4Q02 |
3Q02 |
QOQ |
4Q01 |
YOY |
2002 |
2001 |
YOY |
|
Sales |
2,090 |
1,765 |
18% |
2,698 |
(23%) |
7,615 |
7,558 |
1% |
|
COG |
1,697 |
1,393 |
22% |
1,725 |
(2%) |
6,036 |
6,076 |
(1%) |
|
Gross margin (%) |
18.79% |
21.08% |
N.A. |
36.07% |
N.A. |
20.74% |
19.61% |
N.A. |
|
SG&A |
637 |
483 |
32% |
627 |
2% |
2,105 |
2,030 |
4% |
|
Interest expense |
2 |
19 |
(91%) |
3 |
(39%) |
23 |
704 |
(97%) |
|
Normalized profit |
75 |
59 |
26% |
58 |
29% |
384 |
(446 ) |
N.A. |
|
Net profit |
75 |
14,807 |
(99%) |
78 |
(4%) |
15,178 |
(791 ) |
N.A. |
|
EPS (Bt) |
0.23 |
13.33 |
(98%) |
0.24 |
(4%) |
46.94 |
(5.34 ) |
N.A. |
Source : Kim Eng Research
ROBINS Income
statement
|
Income
statement (Bt mn) |
1999 |
2000 |
2001 |
2002 |
2003F |
2004F |
|
Sales |
6,501 |
7,000 |
8,154 |
8,239 |
8,439 |
8,936 |
|
Other income |
778 |
1,045 |
279 |
367 |
404 |
445 |
|
Total
revenues |
7,280 |
8,045 |
8,433 |
8,606 |
8,843 |
9,380 |
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Cost of goods sold |
4,596 |
5,020 |
5,506 |
5,502 |
5,616 |
5,963 |
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Depreciation and
amortization |
703 |
588 |
570 |
534 |
544 |
560 |
|
SG&A and others
expenses |
2,123 |
2,183 |
2,030 |
2,105 |
2,194 |
2,341 |
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EBIT |
(142) |
255 |
327 |
466 |
489 |
516 |
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Interest expenses |
915 |
1,944 |
704 |
23 |
22 |
8 |
|
EBT |
(1,057) |
(1,690) |
(377) |
443 |
468 |
508 |
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Earnings
before extra items |
(1,030) |
(1,855) |
(446) |
384 |
421 |
458 |
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Equity acc. +
extraordinary gains |
(4,562) |
(5,175) |
(344) |
14,795 |
- |
- |
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Net
profit |
(5,591) |
(7,030) |
(791) |
15,178 |
421 |
458 |
Source : Kim Eng Research
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