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
AIO Price at posting:
$1.49 Sentiment: Buy Disclosure: Held
