MY Lion Industries Initiating Coverage 20170519 RHB.pdf
Text preview
Lion Industries Corporation
Malaysia Initiating Coverage
19 May 2017
Basic Materials | Metals
1HFY17 results review
Into the black. Lion Industries’ core earnings were positive in 1HFY17 even though there
was a slight drop in revenue (-0.8ppt YoY), mainly due to higher steel ASP and the surge
in the steel segment’s EBIT margin (+14.3 ppt YoY).
Its property unit recorded higher EBIT margin (+7.5 ppt YoY), mainly contributed by The
Promenade.
Figure 4: Lion Industries' 1HFY17 results review
FYE Jun (MYRm)
2QFY16
1QFY17
2QFY17
QoQ (%)
YoY (%)
1HFY17
1HFY16
YoY (%)
Revenue
596.5
514.2
644.5
25.4
8.0
1,158.7
1,168.5
(0.8)
EBITDA
67.1
32.8
98.0
>100
46.0
125.6
18.0
>100
EBITDA Margin (%)
11.3
6.4
15.2
NA
NA
10.8
1.5
NA
Depreciation
(29.4)
(26.9)
(25.6)
(4.8)
(12.9)
(52.5)
(58.6)
(10.4)
EBIT
(28.1)
17.3
55.7
>100
NM
73.1
(40.6)
NM
EBIT Margin (%)
(4.7)
3.4
8.6
NA
NA
6.3
(3.5)
NA
Interest expense
(11.1)
(5.7)
(6.7)
NM
NM
(12.4)
(24.1)
(48.6)
Interest income
Associates
10.9
(12.1)
1.4
(12.8)
2.1
18.4
48.6
NM
(80.7)
NM
3.5
5.6
13.5
(0.8)
(73.9)
NM
EI/Others
Pretax profit
68.5
27.3
1.1
0.2
17.2
69.5
NM
NM
NM
>100
18.3
69.8
70.5
15.7
NM
>100
Pretax Margin (%)
4.6
0.0
10.8
NA
NA
6.0
1.3
NA
Tax
(2.0)
(2.7)
(10.2)
>100
>100
(13.0)
(5.7)
>100
Effective tax rate (%)
7.5
NM
14.7
NA
NA
18.6
36.5
NA
Minority Interest
0.7
0.0
3.8
NA
NA
3.9
1.9
NA
Net Profit
24.6
(2.5)
55.5
NM
>100
53.0
8.1
>100
Core Net Profit
(44.0)
(3.6)
38.3
NM
NM
34.6
(62.4)
NM
Core net margin (%)
(7.4)
(0.7)
5.9
NA
NA
3.0
(5.3)
NA
Source: RHB, Company data
See important disclosures at the end of this report
6
Comments
Higher steel revenue was offset by
lower revenue from the building
materials segment
Higher EBIT margin due to stronger
steel ASP
Higher core net profit was mainly due
to a stronger steel ASP and sales
tonnage