Allcargo Global Logistics:: Results in-line, maintain Buy :Centrum

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Results in-line, maintain Buy
Allcargo Global Logistics’ (Allcargo) Q1 results were inline
with estimates. While higher realisations and steady
volumes helped boost revenues, lower operating costs
led to margin expansion and higher profitability.
Container volumes remained steady (up 10.1% YoY but
flat QoQ) at 121,310 TEUs. We remain upbeat on the
outlook of Allcargo due to growth in container volumes
both in the CFS and MTO operations and continuous
improvement in ECU Line’s profitability margins.
􀂁 Q1 results in-line: Consolidated revenue grew 24.9%
YoY to Rs7,315mn, just 1.0% higher than estimated.
EBITDA margins improved 249bp YoY to 12.3%, 100bp
higher than estimated. Net profit at Rs499mn was 3.5%
above our estimates, while net margin at 6.8% was inline
with our expectation of 6.7%.
􀂁 ECU Line continues to outperform: ECU Line reported
a revenue growth of 27.0% YoY to Rs5,160mn while
EBITDA jumped 99.5% YoY to Rs292mn. Net profit after
minority interest increased 64.1% YoY to Rs119mn.
Profitability margins improved with OPM up 206bp YoY
to 5.7% and NPM up 52bp YoY at 2.3%.
􀂁 Maintain estimates and Buy rating: With Q1 results
in-line, we are maintaining our earning estimates at
Rs15.2 for CY11 and Rs18.1 for CY12. We also maintain
our Buy rating with a price target of Rs217, valuing the
stock at 12x CY12E earnings. At the CMP, the stock
trades at 9.2x CY12E earnings and 5.5x EV/EBITDA.