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PADAENG
INDUSTRY PCL
PDI <Bt9.55>
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Recommendation
New : SELL
Previous : SELL
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Disappointing
2002 loss of Bt29mn on falling zinc prices
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Padaeng Industry (PDI)
recorded a net loss of Bt29mn in 2002 compared to a net
profit of Bt335mn in 2001. This was due to average zinc
price dropping 12% from $886/tonne in 2001 to only
$779/tonne in 2002. Also, the baht appreciated about 3%
against the dollar last year, further eroding the company's
margins and earnings.
Although zinc sales volume
rose around 2% to 105,945 tonnes and domestic sales portion
increased from 75% to 81%, it was not enough to offset the
negative impact from weakening zinc prices and strengthening
baht.
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PDI income statement |
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Income Statement (Mn
Bt) |
4Q02 |
3Q02 |
QOQ |
4Q01 |
YOY |
FY01 |
FY02 |
% |
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Sales |
1,024 |
1,145 |
(10%) |
1,182 |
(13%) |
5,197 |
4,390 |
(16%) |
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COGs |
930 |
1,055 |
(12%) |
1,105 |
(16%) |
4,391 |
3,924 |
(11%) |
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Gross profits |
95 |
89 |
6% |
77 |
23% |
806 |
466 |
(42%) |
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Gross margin (%) |
9% |
8% |
N.A. |
7% |
N.A. |
16% |
11% |
N.A. |
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SG&A |
115 |
87 |
33% |
105 |
10% |
399 |
452 |
13% |
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EBITDA |
69 |
79 |
(12%) |
45 |
54% |
769 |
344 |
(55%) |
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EBITDA margin (%) |
7% |
7% |
N.A. |
4% |
N.A. |
15% |
8% |
N.A. |
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Interest expense |
13 |
13 |
3% |
19 |
(29%) |
93 |
55 |
(41%) |
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Net profit before extra item |
(34 ) |
(6 ) |
476% |
(62) |
(46%) |
293 |
(31 ) |
N.A. |
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Extra ordinary gain (loss) |
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- Forex gain (loss) |
5 |
(22 ) |
N.A. |
1 |
316% |
5 |
(4 ) |
N.A. |
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- Other (loss) |
18 |
(6 ) |
N.A. |
23 |
(21%) |
38 |
6 |
(84%) |
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Net profit |
(11 ) |
(33 ) |
(67%) |
(151) |
(93%) |
335 |
(29 ) |
N.A. |
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EPS (Bt) before extra item |
(0.15) |
(0.03) |
476% |
(0.28) |
(46%) |
1.30 |
(0.14) |
N.A. |
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EPS (Bt) |
(0.05) |
(0.15) |
(67%) |
(0.67) |
(93%) |
1.48 |
(0.13) |
N.A. |
Source : Kim Eng Research
PDI's 4Q02 bottom line would have been worse
if not for extraordinary gains. Excluding these items, the company would
have made a loss of Bt34mn, compared to the previous quarter's Bt6mn loss.
Looking forward, we expect to see a slight
improvement in PDI's 1Q03 performance since average zinc prices have risen
2% from $767/tonne in 4Q02 to the current average of $783/tonne.
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Average zinc price
($/tonne) |
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1Q02 |
2Q02 |
3Q02 |
4Q02 |
Jan 03 -
Feb 24 |
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Zinc price |
785 |
788 |
769 |
767 |
783 |
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Source : Kim Eng Research |
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We like PDI's long-term
prospects, but its near-term earnings performance will
continue to be affected by depressed world zinc prices. We
have had to revise down our full-year 2003 assumption on
zinc prices from $800/tonne to $780/tonne. We have also
lowered our earnings projection by 83% to Bt30mn this year
and our target price from Bt12.50 to Bt9.10. At the current
share price, PDI is trading on a 2003 PER of 72x, EV/EBITDA
of 8x and a 5% premium above our new target price. We
reiterate our SELL recommendation.
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Financial ratios |
1999 |
2000 |
2001 |
2002 |
2003F |
2004F |
2005F |
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Sales (Bt mn) |
4,444 |
5,309 |
5,197 |
4,390 |
4,543 |
4,686 |
4,734 |
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EBITDA (Bt mn) |
913 |
923 |
769 |
340 |
379 |
395 |
396 |
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EBITDA margin (%) |
20.6 |
17.4 |
14.8 |
7.7 |
8.3 |
8.4 |
8.4 |
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Net profit (Bt mn) |
145 |
211 |
335 |
(29) |
30 |
61 |
77 |
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EPS (Bt) |
0.96 |
1.27 |
1.48 |
(0.13) |
0.13 |
0.27 |
0.34 |
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PER (x) |
9.9 |
7.5 |
6.4 |
N.A. |
72.0 |
35.3 |
28.0 |
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EV/EBITDA (x) |
5.3 |
4.4 |
5.2 |
9.0 |
8.0 |
7.4 |
7.1 |
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Gearing (x) |
2.6 |
1.8 |
0.6 |
0.5 |
0.2 |
0.2 |
0.2 |
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ROA (%) |
3% |
0% |
7% |
-1% |
1% |
1% |
2% |
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ROE (%) |
12% |
11% |
12% |
-1% |
1% |
2% |
3% |
Source : Kim Eng Research
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Analyst:
Kitichan Sirisukarcha (Ext. 1570)
Email: kitichan.s@kimeng.co.th
If you have
any questions or suggestions please feel free to email our Research
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Copyright © March 2000,
Kim Eng Securities (Thailand) PLC. All rights reserved.
Disclaimer
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