CLSA PGas reports 9M09 results - in line with our expectations

It reported revenue of Rp13.5tn up 50% yoy. Net profits increased 145% yoy from Rp1.79tn to Rp4.4tn.

The company’s distribution volumes were 776mmscfd up 37% yoy. Operating profits make up 80% of our full year forecasts. Net profits make up 80% our full year forecasts. Stronger currency in 4Q09 will mean lower operational profits in 4Q09 but we are comfortable with our numbers as we had been slightly conservative with our distribution volumes at 777mmscfd for full year 2009. The company’s 3Q09 distribution volumes reached 816mmscfd.

The company’ reported forex gain of Rp911bn. However it recorded a loss on cross currency swap of Rp354bn.

Sharp increased in profits (145%) doubled return on assets from 8.2% in 9m08 to 16% 9m09. ROE improved from 24% from 9m08 to 44% in 9M09.
As the distribution volumes increased by 37%, fixed costs per unit reduced leading to increase in operating margin from 39% in 9M08 to 44% in 9M09. We have forecasted lower selling and distribution expenses as a percentage of sales going forward as distribution volumes increases.

The company’s cash flow from operations of Rp5.38tn is enough to finance the entire capex for West Java LNG receiving terminal. Higher dividend payout is a possibility going forward. We have forecasted 50% dividend payout.
Reiterate outperform. With Price Target Rp4000/share.