Airports of Thailand

Airports of Thailand Plc (AOT)

4Q13A. AOT reported a record high 4QFY13A (Jul-Sep 2013) profit of Bt5.2bn, +242% YoY and +64% QoQ. Excluding Bt3.4bn extra gain from the reversal of impairment loss at Don Muang gives a normalized profit of Bt1.8bn, +16% YoY but -35% QoQ. The higher extra gain than expected led net profit to beat our Bt4.8bn and go far above market consensus of Bt2.5bn. The improvement YoY was backed by higher traffic and better cost control after fully reopening Don Muang on Oct 1, 2012. The fall QoQ came from seasonal bonus expenses.
Highlights in 4QFY13:
  Revenue was Bt9.5bn, +21% YoY and +7% QoQ. The increase came mainly from more passengers (+18% YoY) and aircraft traffic (+17% YoY) plus higher concession revenue (+29% YoY) from the full opening of Don Muang on Oct 1, 2012.
  Operating expenses were Bt6.7bn, +16% YoY and +36% QoQ. The biggest factor behind the surge QoQ was the recording of seasonal bonus expenses (6.5-month bonus recorded in 4QFY13 vs. 4.5-month bonus already expensed in 9MFY13A).
Gross margin was 29%, +3ppts YoY from a rise in revenue amid lower costs but down 15ppts YoY from seasonal bonus expenses.
BUY; DCF-PT at Bt235. We expect AOT to announce a 2013F DPS of Bt2.9 based on its minimum dividend payout of 25%. In the near term, the momentum of its traffic growth may slow from the double-digit growth enjoyed for thirteen consecutive months (21% on average) due to China’s attempt to eliminate zero dollar tours plus the local political unrest. Longer term, we still like AOT for: 1) the biggest beneficiary from aggressive fleet expansion of airlines in Thailand; 2) potential additional concession revenue from the incremental commercial area at new terminals in FY2014.