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STOCK FOCUS: Airports of Thailand

BackDec 06, 2006

Tisco Securities has maintained its hold rating on Airports of Thailand (AOT) stock with a 12-month target price of Bt59.

AOT's net profit for its 2006 fiscal year ending September 30 rose 40 per cent year on year to Bt10.38 billion, boosted mainly by an unrealised foreign-exchange gain of Bt4.07 billion - up from Bt1.22 billion - and a lower effective tax rate.

This reflected appreciation of the baht against the Japanese yen. Most of AOT's loans are denominated in yen.

Meanwhile, its effective tax rate declined to 17.4 per cent from 23.3 per cent in the previous year as a result of the reversal of income into expenses in the third and fourth quarters of its 2006 fiscal year.

AOT's operating profit fell 10.5 per cent year on year to Bt6.84 billion.

Higher operating costs associated with the opening of Suvarnabhumi Airport, which began commercial operations on September 28, were mainly responsible for this decline.

Total operating expenses soared by 30 per cent year on year to Bt9.42 billion. Key factors included a 62.6-per-cent rise in expenses to Bt3.63 billion and a 23.4-per-cent increase in personnel costs to Bt3.38 billion that stemmed from the hiring of new staff for Suvarnabhumi Airport.

At the end of its fiscal year, the company had a total of 3,986 employees, compared with 3,200 at the end of the previous fiscal year.

In addition, its depreciation expenses rose slightly to Bt1.4 billion, up 1.5 per cent year on year. As a result, its margins for operating profit, and earnings before interest and tax weakened to 42.1 per cent from 51.3 per cent and 47.3 per cent from 53.7 per cent, respectively.

 The broker has lowered its net-profit forecasts for 2007 and 2008 quite sharply, by 29.4 per cent to Bt2.34 billion and by 14.3 per cent to Bt4.1 billion, respectively.


Source: The Nation. Wednesday, December 6, 2006