Berlian Laju Tanker (CIMB)

OUTPERFORM Maintained
RP340 Target: Rp480
Mkt.Cap: Rp3,927,282m/US$460m
Tanker Shipping
Oil tanker losses spoilt 4Q numbers

• Below; but maintain OUTPERFORM. 4Q10 core net loss was US$50.9m, against our expectation of a profit of US$9.5m. Consequently, full-year core net loss amounted to US$75.5m against our US$15.1m loss forecast. While the chemical division performed according to expectations, the oil tanker & FPSO segment unexpectedly plunged into a 4Q operating loss of US$26.5m, from a US$1.5m loss in 3Q. We reflect the tough operating conditions in the oil tanker market by slashing core net profit by 266% for 2011 to a loss of US$46m, and by 90% for 2012 to just US$4m. We introduce 2013 forecasts. We maintain OUTPERFORM because chemical tanker rates should recover in 2012 and beyond, potentially providing catalysts, though we lower our target price to Rp480 from Rp495, still based on a 20% discount to SOP, following our earnings adjustments.

• Chemical shipping met forecasts; other divisions did not. The chemical shipping division earned US$93m in operating profit for the full year, meeting our forecast of US$94m. Chemical revenue was up 11% yoy, but EBIT was down 7% yoy on a 37% rise in bunker costs. On the other hand, gas tanker operating earnings were US$11m for 2010, against our US$15m expectation, due in part to an unexpected rise in depreciation in 4Q10 and higher-than-expected staff costs. Gas revenue was up 16% yoy for the full year, but EBIT was down 30% on higher depreciation and operating costs. The worst-performing segment was oil tankers, where the operating loss was a massive US$33.2m in 4Q against an operating profit of US$1m in 3Q. Tanker revenue collapsed to virtually nothing in 4Q, although costs were still being incurred. This loss more than offset the better FPSO performance, which earned US$6.7m in 4Q against a loss of US$2.6m in 3Q.

• Buana listed in May. PT Buana Listya Tama was listed at Rp155/share on 23 May and we have reflected the listing in our forecasts and valuation. We expect BLTA to recognise a gain on disposal of US$48m in 2011, but minority interest representing a 37.7% stake in Buana will also be recognised against Buana’s earnings. We have not imputed any cabotage contract wins in our numbers.