PPAP's 3Q19 review: Net profit rises 47.1% YoY in first nine months despite 8.6% YoY drop in 3Q19

Container throughputs post highest YoY growth in eight years

Container throughputs handled by PPAP in 3Q19 hit an all-time high of 92,494 TEUs, surging 44.4% compared to 3Q18, the highest YoY growth for quarterly throughputs the port has achieved since 2011. Container shipments during the period rose 27.5% YoY to 635,409 tons, driven significantly by export shipments which jumped 41.4% YoY, while import shipments increased robustly by 21.6% YoY. In contrast, general cargo shipments declined 15.1% YoY to 155,404 tons from 182,946 tons in 3Q18 most likely as the result of customers switching to container shipment. Meanwhile, oil & gas cargo shipment continued its robust growth of 16.4% YoY, totaling 199,956 tons between July and September.

Container throughputs reached 212,584 TEUs (+33.9% YoY) in the first nine months of 2019, almost as many as that for the whole last year, and is on track to achieve impressive growth for the whole this year. Over the same period, total cargo shipments were 2,856,587 tons (+24.4% YoY), of which 1,575,562 tons (+35.0% YoY) were container shipments; 551,591 tons (-0.8%YoY) were general cargo shipments; and 729,434 tons (+27.0% YoY) were oil & gas cargo shipments.

Top-line growth is strongest since IPO

With marked increase in container throughputs, top-line saw the strongest growth since at least the IPO, rising 38.1% YoY to KHR33.21bn in 3Q19. It is also the largest revenue earned by the company in a three-month period, and was contributed mainly by three main revenue sources namely stevedoring, lift-on lift-off (LOLO), and port services, which soared 34.2%, 37.2%, 21.7% YoY, respectively. Meanwhile, income from storage services increased five-fold to KHR1.74bn, exceeding 5% of the revenue for the first time, and suggesting that the port operator seems to have succeeded in diversifying its revenue through business expansion in storage and warehousing facilities.

In the first nine months of 2019, PPAP earned KHR80.3bn in revenue, up 30.4% YoY and equal to 95.8% of annual revenue in 2018. On top of this, the company also earned KHR13.66bn in other non-operating income, compared to only KHR3.18bn in the first nine months of 2018.

Operating profit margin widens

EBTIDA and EBIT jumped 53.9% and 68.3% YoY to KHR22.2bn and KHR19.0bn, respectively, in 3Q19. EBIT margin widened by 8.4%pt YoY to 57.1% as total revenue grew faster than total operating cost. Compared to revenue growth of 38%, cost of services rose only 30.0% YoY, while general administrative expenses increased only 12.6% YoY.

In the first nine months of 2019, the company earned KHR57.8bn (+71.0% YoY) in EBITDA, and KHR48.3bn (+94.7% YoY) in EBIT.

Bottom line drops 8.6% YoY in 3Q19, but rises 47.1% YoY in first nine months

Net profit in 3Q19 amounted to KHR14.1bn, an 8.6% decrease from same period last year. Bottom line dropped despite 68.8%YoY increase in pre-tax profit due to positive tax expenses in 3Q18 that was the result of substantial deferred tax income related to the origination of temporary difference, occurred as PPAP received $15mn upfront leasing income from YUETAI Group.

Despite the decrease in 3Q19, net profit earned from January to September of 2019 climbed 47.1% to KHR35.6bn, exceeding the annual net profit in 2018 of KHR32.9bn.


Equity Report

19th November 2019


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