166% jump in 2002 earnings from industrial land sales

Amata Corporation Plc. (AMATA) announced yesterday better-than-expected 4Q02 earnings of Bt189mn. This brought full-year 2002 earnings up to Bt896mn, representing an increase of 166% over the previous year. It was also 6.4% higher than our previous earnings estimate of Bt842mn. A strong increase in new industrial estate land sales and steady increase in utility service income were the two main earnings drivers.

AMATA income statement

If we exclude extraordinary items totaling Bt324mn, AMATA's 2002 nomalised net profit increased 164.6% last year to Bt572mn. The extraordinary items were largely debt restructuring gains and accounting adjustments after amending the joint venture agreement with the IEAT.

AMATA quarterly earnings

In 2002, AMATA recorded land sales of Bt1,998mn, up 95% yoy. AMATA sold approximately 750 rai of land, compared to 600 rai in 2001. Meanwhile, utility sales increased by 21% from the growth in number of tenants in its industrial estates.

AMATA achieved 2002 gross margins of 38.3%, a decline from the previous year, due to slightly higher cost of land bank and development costs. Meanwhile, the company’s sales and administrative expenses for 2002 decreased slightly by Bt4mn from 2001.

The financial position of the company is still very strong with net debt-to-equity ratio of 0.19x and cash on hand of Bt397mn. AMATA generated cash flow per share of Bt0.9 in 2002.

The current share price is trading on 28% discount to our fair value estimate of Bt5.4 derived from our DCF model. By other valuation models, AMATA shares look cheap on a 2003 PER of 6.28x, EV/EBITDA of 5.41 and dividend yield of 7.95%.

AMATA earnings summary