PLIPDECO earnings per share head north

Point Lisas Industrial Port Development Corporation Limited Six month interim to June 30 2004

Earnings per share for the half year to 30 June 2004 increased significantly over the corresponding period last year. PLIPDECO posted 78 cents earnings for the period under review, compared with 43 cents in 2003, an increase of 35 cents or 81.4 percent. Turnover grew by 29.21 percent to reach $93.64 million and Fair value gains were up from $2.7 million to $19.15 million resulting in Total revenue of $112.79 million, up 49.99 percent. Fair value gains are the result of the accounting requirement of IAS 40 and does not constitute a return from trading activities. The growth in Turnover is attributable mainly to increased activity at the Port of Point Lisas, which is expected to continue to the end of the year. Turnover in the Port and related activities segment increased by 27.06 percent to $56.92 million. The Estate segment recorded growth in Turnover of 22.1 percent to $22.64 million and Turnover in the Towage segment was up 57.92 percent to $13.47 million while other sources contributed $615,000.

Operating profit rose 69.93 percent to $43.91 million, giving an Operating profit margin of 38.93 percent, up from 34.36 percent. Adjusting for the Fair value gains, Operating Profit amounted to $24.76 million, up a mere 7.13 per cent from the prior period. This adjustment also resulted in an Operating profit margin of 26.43 percent compared with 31.88 percent from the prior year, indicating that Management may need to take a closer look at the cost structure of the company or find more efficient methods of through-put. Investment income more than doubled to $2.31 million, up 106.26 percent, while Finance costs fell 15.9 percent to $10.67 million resulting in Profit before tax increasing to $35.54 million, up 149.14 percent. This compared to an increase of 42.08 percent in Profit before tax from segmented operations to reach $16.39 million, shows the significance of the fair value gains which are higher than profit from normal operating activities. PLIDECO also benefited from a sharp reduction in its effective tax rate from 20.48 percent to 13.20 per cent, which saw Profit after tax reaching $30.85 million, up 171.96 percent.

Net profit margin grew from 15.09 percent to 27.35 percent. An interim dividend of ten cents per share is payable on 8 October to shareholders on the register as at 17 September. PLIPDECO remains in a strong cash position with Cash and cash equivalents of $57.44 million, more than half the value of Total current assets which reached $100 million, up 69.26 percent. On the other hand, Total current liabilities were reduced by 42.25 percent to $39.75 million. This resulted in Working capital of $60.3 million compared with a deficit for the same period last year of $9.7 million. With Fixed assets increasing 8.89 percent to $1.16 billion, PLIPDECO has Net assets of $160.3 million, representing a growth of $224.63 percent, up by $110.98 million from $49.4 million. PLIPDECO shares opened the year trading at $11.15 per share and appreciated 79.37 percent to its current price of $20, up $8.85. Based on the six-month interim, we project year end earnings of $1.75 per share inclusive of fair value gains, which at the current price gives an earnings multiple of 11.42 times.