Puncak  Niaga  Holdings  (Puncak)'s  4QFY12  net  profit  of  RM12.2m  was  hit  by impairments  and  higher  water  treatment  expenditure  although  these  were  partially mitigated  by  liabilities  adjustment.  Still,  its  full-year  bottomline  was  impressive despite  coming  in  below  our  and  street  estimates,  thanks  to  a  higher  water  tariff compensation  and  its  O&G  contribution.  We  include  some  provisions  for  its  water distribution and treatment division as the ongoing water asset restructuring is likely to drag on, and hence trim our FY13/14 projections by 7.3%/8.4%. This lowers our FV to RM2.00, based on 3x FY13 EPS.  Trading BUY maintain.

Below  expectation.  Puncak's  FY12  net  profit  of  RM237m  was  15.5%/16.2%  below OSK/consensus  estimates.  Its  4QFY12  results  included  the  impairment  of  compensation receivables  amounting  to  RM81.4m,  which  was  partially  offset by  a  RM58.6m adjustment in  its  long  term  liabilities  (both  net  of  deferred  tax).  That  said,  the company's full  year results are still commendable,  reflecting a strong  rebound  from  a  barely-breakeven  2011. The  drastic  improvement  can  be  mainly  attributed  to  higher  water  tariff  compensation arising  from  the  scheduled  25%  tariff  hike,  which  should  have  been  gazetted  on  1  Jan
2012.  Apart from that, the group's Oil & Gas (O&G) division continues to churn in striking numbers,  with  FY12  profit  before  interest  and  tax  (PBIT)  of  RM83.9m,  up  331.4%  y-o-y. Also, its construction division posted PBIT of RM11.5m in 4Q, a sharp recovery from 3Q.

Source: OSK