fy09 preview jbwere 12mth target $1.70

RESULT PREVIEW

Asciano Group
FY09 Result Preview

Result Date:
• Wednesday, 26 August 2009

GSJBW Estimates:
• EBITDA: $650.4m
• NPAT (pre NRIs): -$0.6m
• Dividend: n/a
• Divisional EBITDA
Patrick $342.0m
Pacific National $331.7m
Trading Comment:
• Given AIO provided an earnings update at its capital raising for the 11 months to 31 May, the result is not likely to contain any surprises.
• The market's focus will be on outlook comments regarding port and rail volumes, cost control, capital structure and distributions.
• While the steep declines in port volumes observed in early 2009 have not continued, they still remain fairly weak. We don’t expect to see much improvement until early 2010.
• Intermodal and Auto volumes also remain weak while conversely coal volumes have been very robust and will continue to grow into FY10.
Look Out For:
• Update on deleveraging process ie how much debt will be repaid and will remaining debt be refinanced or restructured before maturity.
• Update on cost control initiatives and progress vs target of ~$100m.
• Discussion on likely level of distributions, if any, in FY10 and distribution policy thereafter.
• Update on negotiations to secure contracts for remaining ~6mt of capacity in Queensland coal market.
• Further detail on likely price increases on Hunter Valley coal contracts.
Briefing Details:
• TBA

BUY
Key Information
Stock Code AIO

Share Price $1.495

12 Month Price Target $1.70

Expected 12M Total Return 13.7%
Investment Data
Issued Capital 2834.6m
Market Capitalisation $4238m
% of S&P 200 Index 0.4%
Free Float 90.17%
Turnover $357.5m/month
12 Month Price Range 399¢-32¢
Debt/Equity 112.4%
Investment Arithmetic
Jun year end 08A 09E 10E 11E
Net Profit Rep. ($m) -188 -160 91.3 190.7
NPAT Pre-NRI's ($m) 51.2 -0.6 121.3 190.7
EPS Adj. (¢) 11.0 5.3 6.3 8.6
EPS Growth (%) 0.9 -51.8 18.9 36.5
PER (x) 13.6 28.2 23.7 17.4
Relative PER (%) 14.1 78.9 51.3 45.7
Dividend (¢) 46.0 0.0 6.0 8.5
Yield (%) 30.8 0.0 4.0 5.7
Franking (%) 0 0 0 0
FCFPS (¢) 17.7 16.5 9.6 13.6
P:FCFPS (x) 8.4 9.1 15.6 11.0
EV/EBITDA (x) 9.1 7.6 9.5 8.1
BV (¢) 322 204 160 159
P/BV (x) 0.5 0.7 0.9 0.9
Av. Full Dil. Shares (m) 938.8 987.7 2744 2835
Share Price Chart
Relative Price Performance
1m 3m 12m
vs. S&P 200: 3.8% 23.2% -50.9%
vs. MSCI - World: 8.6% 35.5% -45.2%
Source: Company data, IRESS, and GSJBW Research estimates