MTD Walkers Q3 profits up 435%

Hi Mates

The 3rd quarter result was released… KAPI highlights very Amazing Profit for the 3rd quarter…

No one can say from this 3rd quarter that, KAPI is loss making company and burn their fingers by buying loss making company…

This quarter performance highlights that KAPI started to generate revenue from new contracts and projects, which have been pointed out in this post…

After the rights issue, as I predicted the 4th quarter and coming quarters results will be remarkable in terms of profit and its value… This 3rd quarter performance is the first step to entering into KAPI's new milestone....

KAPI 3rd quarter results @ Glance - ( Income Statement & Balance Sheet – Group)

Revenue For the quarter - Rs.653,195,579 – 129% increased

Revenue For 9 months - Rs.1,553,568,289 – 45% increased

Operational Profit For the quarter - Rs.179,910,318 – 520% increased

Operational Profit For 9 months - Rs.242,379,741 – 89% increased

Net Profit For the quarter - Rs.126,059,112 – 768% increased

Net Profit For 9 months - Rs.110,218,497 – 641% increased

EPS For the quarter (Before the Right issue) - Rs.22.05 whereas 2009- Rs.2.54

EPS For 9months (Before the Right issue) - Rs.19.28 whereas 2009 – Rs.2.60

Net assets Per Share (Before the Right issue) – Rs.47.18 ---- 2009 Rs. 43.35

The Financial highlights after the rights issue based on 3rd Quarter Results…


The Right Issue

Right issue 19:1 @ 33

Total Share issued on Rights ----------------- 108,639,283

Total Proceeds From Rights ----------------- Rs. 3,585,096,339.00

NAV/ Share After Rights

Equity ----------------------------------------------- Rs.479,584,783

Total Proceeds From Rights ----------------- Rs. 3,585,096,339

Total -----------------------------------------------Rs. 4,064,681,122

Total No of Shares After Rights-------------- 114,357,140

NAV Per Share ---------- Rs.35.54 ( Business Value Per Share)

Total Attributable Value to Equity Shareholder ------------ Rs. 269,778,996

Total Proceeds From Rights ----------------- --------------------Rs. 3,585,096,339

Total ----------------------------------------------- -------------------- Rs. 3,854,875,335

Total No of Shares After Rights----------------------------------- 114,357,140

NAV Per Share ---------- Rs. 33.70 ( Value /Share to Equity Shareholder)

EPS / Share After Rights

Total Group Earnings --------- ---------------------------------- Rs.110,218,497

Total No of Shares After Rights----------------------------------- 114,357,140

EPS/ Share ------------- Rs. .96

Total borrowing of Group ( As per Dec 2010)


Interest Bearing loans---------------------------------- Rs. 849,770,754

Non Interest Bearing loans--------------------------- Rs. 3,597,928,709 ( this may be received from related company to acquire the

company , stated in the propose of right issue)

Overdraft ------------------------------------------------ Rs. 311,689,918

Total Borrowings --------------------------------------- Rs. 4,759,389,381

Total Interest Expenses.-----------------------------------Rs 112,228,527

The Purpose of right Issue

The purpose for which the proceeds of the issue are to be utilized
1. To capitalize loans received for the acquisition of companies previously
2. To acquire Northern Power Company (Pvt) Ltd
3. To Finance Working Capital of the company

http://www.cse.lk/cmt/uploadAnnounceFiles/9961288151500_444.pdf

The proceeds of this Rights Issue will be used for the 100% purchase of Northern Power Company Private Limited, a 30MW HFO power plant located in Chunnakam, Jaffna, as the largest provider of electricity to the Jaffna Peninsula. The balance of the Rights Issue proceeds will be used for capital expenditure and working capital requirements of the MTD Group of Companies.

http://srilankastockpicks.blogspot.com/2010/12/mtd-walkers-plc-announce-rights-issue.html

We do not know about the numbers of the loans received for the acquisition of companies previously and the amount required to acquire Northern Power Company (Pvt) Ltd. However I would say major part of the loan will be settled from the right issue. Hence Finance cost amounts Rs.67Mn will be reduced and this would strengthen the bottom line. This scenario will highlight only on 4th quarter results.

Let us workout the utilization of right issue

Total Proceeds From Rights ----------------- ----------Rs. 3,585,096,339

Interest Bearing loans---------------------------------- Rs. 849,770,754

Non Interest Bearing loans--------------------------- Rs. 3,597,928,709 ( this may be received from related company to acquire the company , stated in the propose of right issue)

Overdraft ------------------------------------------------ Rs. 311,689,918

Total Borrowings --------------------------------------- Rs. 4,759,389,381

We do not the company preference to settle the loan facility. As stated in the purposes of right issue announcement, part of non interest bearing loan will be settled from the right issue proceeds and part of interest bearing loan also will be settled…

We can see only the restructured and sound balance sheet from the 4th quarter by reflecting above numbers. Further income generate from new projects (mentioned in previous) also will contribute to strengthen the company performance and value…


Keep on Investing in growth sectors……

Happy Trading

Hi Seyon,

Thanks for info. I just went through their Q3 financials and need to clarify the following.

Company EPS for the 3Q 0.02. But group EPS for the 3Q is 22.05.

What is the reason for the significant difference between company and group EPS?

dhamm wrote:Hi Seyon,

Thanks for info. I just went through their Q3 financials and need to clarify the following.

Company EPS for the 3Q 0.02. But group EPS for the 3Q is 22.05.

What is the reason for the significant difference between company and group EPS?

Hi dhamm

MTD Walkers PLC is just only Investment Holding and a parent company to the following companies…This would reflect only the income generated from its subsidiary and group companies... If you see the segment analysis, parent company earnings reflect in investment segment…. As reported results (PAT) amounts to Rs.1,182,672

These are the group companies generates the major part of income....

Walker Sons & Company Engineers (Pvt) Limited Principal operation is Engineering & Construction.

Walkers Piling (Pvt) Limited Principal operation is Piling of foundations and other related earthwork.

CML MTD Construction Limited Principal operation is Construction of roads and highways and providing other engineering services.

And other new Northern Power (Private) Limited principal operation is power generation.

These above subsidiaries companies reported results (PAT) amounts to Rs. 124,011,367…. If u look at the segment analysis, you would be able to understand on this……..

Happy Trading

seyon wrote:Hi Mates

The 3rd quarter result was released… KAPI highlights very Amazing Profit for the 3rd quarter…

No one can say from this 3rd quarter that, KAPI is loss making company and burn their fingers by buying loss making company…

This quarter performance highlights that KAPI started to generate revenue from new contracts and projects, which have been pointed out in this post…

After the rights issue, as I predicted the 4th quarter and coming quarters results will be remarkable in terms of profit and its value… This 3rd quarter performance is the first step to entering into KAPI's new milestone....

KAPI 3rd quarter results @ Glance - ( Income Statement & Balance Sheet – Group)

Revenue For the quarter - Rs.653,195,579 – 129% increased

Revenue For 9 months - Rs.1,553,568,289 – 45% increased

Operational Profit For the quarter - Rs.179,910,318 – 520% increased

Operational Profit For 9 months - Rs.242,379,741 – 89% increased

Net Profit For the quarter - Rs.126,059,112 – 768% increased

Net Profit For 9 months - Rs.110,218,497 – 641% increased

EPS For the quarter (Before the Right issue) - Rs.22.05 whereas 2009- Rs.2.54

EPS For 9months (Before the Right issue) - Rs.19.28 whereas 2009 – Rs.2.60

Net assets Per Share (Before the Right issue) – Rs.47.18 ---- 2009 Rs. 43.35

The Financial highlights after the rights issue based on 3rd Quarter Results…


The Right Issue

Right issue 19:1 @ 33

Total Share issued on Rights ----------------- 108,639,283

Total Proceeds From Rights ----------------- Rs. 3,585,096,339.00

NAV/ Share After Rights

Equity ----------------------------------------------- Rs.479,584,783

Total Proceeds From Rights ----------------- Rs. 3,585,096,339

Total -----------------------------------------------Rs. 4,064,681,122

Total No of Shares After Rights-------------- 114,357,140

NAV Per Share ---------- Rs.35.54 ( Business Value Per Share)

Total Attributable Value to Equity Shareholder ------------ Rs. 269,778,996

Total Proceeds From Rights ----------------- --------------------Rs. 3,585,096,339

Total ----------------------------------------------- -------------------- Rs. 3,854,875,335

Total No of Shares After Rights----------------------------------- 114,357,140

NAV Per Share ---------- Rs. 33.70 ( Value /Share to Equity Shareholder)

EPS / Share After Rights

Total Group Earnings --------- ---------------------------------- Rs.110,218,497

Total No of Shares After Rights----------------------------------- 114,357,140

EPS/ Share ------------- Rs. .96

Total borrowing of Group ( As per Dec 2010)


Interest Bearing loans---------------------------------- Rs. 849,770,754

Non Interest Bearing loans--------------------------- Rs. 3,597,928,709 ( this may be received from related company to acquire the

company , stated in the propose of right issue)

Overdraft ------------------------------------------------ Rs. 311,689,918

Total Borrowings --------------------------------------- Rs. 4,759,389,381

Total Interest Expenses.-----------------------------------Rs 112,228,527

The Purpose of right Issue

The purpose for which the proceeds of the issue are to be utilized
1. To capitalize loans received for the acquisition of companies previously
2. To acquire Northern Power Company (Pvt) Ltd
3. To Finance Working Capital of the company

http://www.cse.lk/cmt/uploadAnnounceFiles/9961288151500_444.pdf

The proceeds of this Rights Issue will be used for the 100% purchase of Northern Power Company Private Limited, a 30MW HFO power plant located in Chunnakam, Jaffna, as the largest provider of electricity to the Jaffna Peninsula. The balance of the Rights Issue proceeds will be used for capital expenditure and working capital requirements of the MTD Group of Companies.

http://srilankastockpicks.blogspot.com/2010/12/mtd-walkers-plc-announce-rights-issue.html

We do not know about the numbers of the loans received for the acquisition of companies previously and the amount required to acquire Northern Power Company (Pvt) Ltd. However I would say major part of the loan will be settled from the right issue. Hence Finance cost amounts Rs.67Mn will be reduced and this would strengthen the bottom line. This scenario will highlight only on 4th quarter results.

Let us workout the utilization of right issue

Total Proceeds From Rights ----------------- ----------Rs. 3,585,096,339

Interest Bearing loans---------------------------------- Rs. 849,770,754

Non Interest Bearing loans--------------------------- Rs. 3,597,928,709 ( this may be received from related company to acquire the company , stated in the propose of right issue)

Overdraft ------------------------------------------------ Rs. 311,689,918

Total Borrowings --------------------------------------- Rs. 4,759,389,381

We do not the company preference to settle the loan facility. As stated in the purposes of right issue announcement, part of non interest bearing loan will be settled from the right issue proceeds and part of interest bearing loan also will be settled…

We can see only the restructured and sound balance sheet from the 4th quarter by reflecting above numbers. Further income generate from new projects (mentioned in previous) also will contribute to strengthen the company performance and value…


Keep on Investing in growth sectors……

Happy Trading

Seyon thanks for the analysis. Due to share being multiplied by 19 now ( Eps diluted to less than 1 upon your calculation) , I feel it might be best to monitor for a while. But yes I agree their growth will be there in the medium to long term. It just that I am yet not sure how the market is responding to the latest infusions.
I can be wrong as this is psycological factor. But good job

slstock wrote:

seyon wrote:

Seyon thanks for the analysis. Due to share being multiplied by 19 now ( Eps diluted to less than 1 upon your calculation) , I feel it might be best to monitor for a while. But yes I agree their growth will be there in the medium to long term. It just that I am yet not sure how the market is responding to the latest infusions.
I can be wrong as this is psycological factor. But good job

Hi slstock

Thanks.. I am very mush sure that the real growth should be highlighted from 4th quarter and coming quarters... Look at KAPI's new projects... this highlights KAPI is on track to generate remarkable revenue and results in coming quarters..

1. Purchasing of Northern Power Company Private Limited, a 40MW HFO power plant located in Chunnakam, Jaffna, as the largest provider of electricity to the Jaffna Peninsula

2. KAPI’s subsidiary CML-MTD Construction (Pvt.) Ltd. Has received the contract to undertake many road and bridge construction projects across the nation.

3. Provide total solution for hydropower power plants in Sri Lanka one-stop-shop concept for mini hydropower companies in the country. In partnership with the world’s largest hydropower company, the Andritz Group.

4. Received contracts for the Southern Highway and other major highways and roads throughout the island.

5. KAPI won the bid to construct Colombo- Katunayake expressway

6. Expand and consolidate its subsidiaries of Walkers Piling and Walkers Engineering by installing two new piling machines worth Rs. 200 million, that has been ordered and two more are in the pipeline in expectation of the construction boom.

In Sri Lanka Now construction sector aiming for a boom. Still the sectors has room to grow. Hence KAPI is only the listed company in this sector and this would be eyed by the local and foreign investor.

Further New Budget brought several benefits for the construction industry.

01.Reduction of the corporate taxation from15% to 12%,
02.VAT and duty concessions for import of construction machinery from 15% to 13%,

I would see all the positive factors will impact KAPI's performance in coming quarter and that would reflect in the share price....

Happy Trading

Thanks Seyon

KAPI will perform very well in comming month.

They have come out of loss making nature.

Friday, February 18, 2011

http://srilankastockpicks.blogspot.com/2011/02/mtd-walkers-q3-profits-up-435.html

MTD Walkers Q3 profits up 435%
MTD Walkers Group declared operating revenues of Rs. 653.2 million for the third quarter, a rise of 28 percent from the previous quarter of Rs. 508.8 million. The Company’s consolidated financial statements for the nine months ending 31st December 2010 stated a profit after tax of Rs 130.1 million; 435 percent rise from Rs 24.3 million in the same quarter last year. "Overall, I am pleased with the quarter’s results in what continues to be a challenging business environment. We are seeing economic recovery across the Nation and we expect to capitalize on these opportunities," said Viraj de Silva, Chief Financial Officer, MTD Walkers Group. "Looking forward, I am confident that the execution in all our operating businesses will enable us to capture the opportunities we are seeing in the industry."

MTD Walkers Group, a company dealing in diverse entities, has a gamut of business functions ranging from engineering, steel fabrications, piling and construction and other infrastructure development. Ranked as one of Sri Lanka’s Top 3 engineering and manufacturing companies, MTD Walkers PLC has undertaken many road construction projects across the nation. As the government makes strides into road development across the nation, MTD Walkers PLC plays a major role in this industry with contracts for the Southern Highway and the A9 road in the North. Having won other construction tenders across the island, the Company envisages to further increase profitability in the near future.

Great Analysis Seyon.. Keep up the good work.. + from me for this ;-)

Guys,
can u figure out what is the value of KAPI in line with 3rd quarter performance( i meant medium term value)
Thank you

KPMG wrote:Guys,
can u figure out what is the value of KAPI in line with 3rd quarter performance( i meant medium term value)
Thank you

Hi KPMG

I predict KAPI would pass Rs.120 in coming quarters, as i mentioned in earlier post the final quarter results would highlight extraordinary performance, and the balance sheet would be restructured and highlighting real value after rights..

Happy Trading