Morningstar Equities Research - CEN-NZ, FXJ, DWS, MYR
Morningstar Equities Research - CEN-NZ, FXJ, DWS,
MYR
Contact Energy Limited CEN-NZ| Strong
first half expected
Morningstar Recommendation:
HoldContact Energy is due to report its first
half fiscal 2013 results on February 18. The firm recently
released its operating statistics for December 2012 and the
first half. The electricity division is projected to deliver
10.5% growth in earnings before interest and tax (EBITDA) to
NZD 231 million for the first half driving overall EBITDA by
9.5% to NZD 252.7 million. The increase in electricity
earnings is largely drive by lower cost as a result of a
decline in wholesale electricity prices and lower generation
cost, partly offset by a fall in spot electricity prices and
lower output. We expect the LPG and meter businesses to
perform in line with last year. Despite a strong first half,
we maintain our full year EBITDA and NPAT of NZD 531 million
(up 5%) and NZD 184 million (up 5%) respectively, as we
expect growth to moderate in second half fiscal 2013. We
also maintain our narrow moat rating on the stock reflecting
the company’s significant nation wide market share its
integrated business model and consolidated industry
structure. Our fair value remains unchanged at NZD 5.50 per
share.
DWS - Downgrade due to price change. Fairfax Media - Upgrade due to price change. Myer Holdings - Upgrade due to price
change.
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