CLSA INDO - Total Bangun Persada 1Q09 results in line

Total Bangun Persada (TOTL IJ) 1Q09 result: inline with expectation. Here are comments from Hadi:

1Q09 Net profit Rp13.4bn grew 27% YoY or accounts for 19% of our forecast.
This is inline with our forecast as we expect seasonality in construction industry.

1Q09 Revenue Rp460bn was increased by 3%YoY as the company is more selective in securing new projects. Slight improvement in 1Q09 gross margin was up to 7.8% driven by stabilizing material prices.

1Q09 operating margin was down to 4.9% but mostly because of the lower effect of Joint Operation income. Further earnings pressure came from higher tax expense due to the new tax formula implementation.

We think the slowdown in high rise building and tightening competition in big cities should continue to limit the company’s growth potential. Maintain SELL