YTL CORP EARNINGS EXPECTED TO FURTHER IMPROVE ON BETTER OUTLOOK - MIDF RESEARCH

KUALA LUMPUR, May 27 (Bernama) -- YTL Corporation Bhd's earnings is forecast to further improve in financial year 2023 (FY23F) driven by its utilities division, improved cement demand and average selling prices (ASPs) as well as an improved outlook for the hotel division, according to MIDF Research.

In a note, it said that despite a below expectation earnings result in the third quarter ended March 31, 2022 (Q3 2022), YTL has reported a net profit of RM414.61 million in the quarter under review, mainly due to the disposal of Electranet, which was partly offset by impairments for project development cost and goodwill.

MIDF said the earnings recovery at YTL Power Seraya continues to gain traction with Singapore electricity prices rising significantly since the second quarter of financial year 2022 (Q2 2022) due to tighter demand-supply conditions.

“The acquisition of the Tuaspring plant, which we expect to be concluded anytime soon, could further boost Seraya’s earnings prospects going forward,” it said.

MIDF noted that YTL is understood to be eyeing the upcoming MRT3 tender, which should help replenish its depleting construction order book, if successful.

“In the cement division, ASP is understood to have risen further to RM300 per tonne from around RM270 per tonne. Coal prices, however, remain stubbornly high, hence we remain cautious of margin compression risk.

“In the near term, YTL Cement’s earnings could nevertheless benefit from the ASP hike given the short-term three-month hedges that the group undertakes for its coal input," it said.

The research house has maintained its 'buy' call for YTL with an improved target price of 79 sen.

At 10.40 am, YTL share price rose half a sen to 60 sen with 5.38 million shares changing hands.

-- BERNAMA