Saudi Airlines Catering Company

Catering
Agriculture & Food Industries Sector
CATERING AB - 6004.SE
27 January 2015
Saudi Airlines Catering Company
Recommendation
Fair Value (SAR)
Price as of 26 January 2015
Expected Return
Neutral
184.00
190.15
-3.2%
Company Data
Tadawul Symbol
52 Week High (SAR)
52 Week Low (SAR)
YTD Change
3-Month Average Volume (Thousand Shares)
Market Cap. (SAR Million)
Market Cap. (USD Million)
Outstanding Shares (Million Shares)
6004.SE
208.50
142.00
0.6%
80
15,592
4,158
82.0
Major Shareholders ( > 5% )
Saudi Arabian Airlines Corporation
Strategic Catering Company
Cat eri ng
Food & Agriculture Index
35.70%
34.30%
Tadawul Index
FY14 Update
Saudi Airlines Catering Company (Catering) disclosed FY14 financial results
unveiling bottom line of SAR 654 million surging 15% versus SAR 569 million
in 2013; an increase attributed to mounting airlines division sales , as well as
reduced selling & administration expenses.
Meanwhile, Q4 net profit leapt 36% YoY reaching SAR 172.8 million versus
SAR 127.2 million in Q4 2013. This substantial rise is ascribed to strong topline growth. The company achieved a 10% rise in total revenues, arising from
growth in in-flight catering (6%), Al-Fursan lounge (41%), SkySales (16%) and
non-airline sales (32%) departments. Al-Fursan lounge sales benefitted from
new openings in Riyadh and Dammam. Meanwhile, the rise in non-airline
sales was accredited to contract wins in remote site management. However,
QoQ surge in bottom line resulted from strong in-flight catering sales during
summer and hajj season.
Moreover, FY14 Operating profit (EBIT) increased 16% hitting SAR 633 million
from SAR 546 million whereas Q4 EBIT escalated 34% YoY coming in at SAR
164.7 million. This figure also leapt 8.2% QoQ from SAR 152.1 million.
Meanwhile, FY14 gross profit (GP) uplifted 12% to SAR 775 million from SAR
692 million. Fourth quarter GP surged 3.3% YoY amounting to SAR 183 million. Nevertheless, Q4 GP tumbled 2.49% QoQ.
Our Comment
The financial results showed huge leaps in net profit . We expect the company to continue its sustainable earnings growth throughout FY15. Thus, we
maintain our fair value of Catering at SAR 184/Share.
160
150
140
130
120
110
100
90
80
For more information you may contact:
Turki Fadaak
Research & Advisory Manager
tfadaak@albilad-capital.com
Or Albilad Capital Head Office:
Tel:
Fax:
P.O. Box:
Riyadh
+966 11 203 9892
+966 11 479 8453
140
11411
FY - Ending December
EV/EBITDA
EV/Sales
P/E
Dividend Yield
P/B
Price/sales
Revenues growth
2011
2012
2013
2014
34.36
27.88
26.21
22.88
10.19
8.63
7.88
6.98
40.78
35.30
29.81
25.66
%0.0
%2.4
%2.9
%2.6
15.89
14.69
13.46
12.72
10.64
9.24
8.35
7.30
%22.8
%15.2
%10.7
%14.4
Our website:
www.albilad-capital.com/en/research
Kindly refer to the financial statements in the report
1
Catering
Agriculture & Food Industries Sector
CATERING AB - 6004.SE
27 January 2015
2010
2011
2012
2013
2014
Total Revenues
COGS
SG&A
EBITDA
EBITDA Margin
Depreciation and Amortization
EBIT
Others
Pre-Tax Income
Tax and Zakat
Net Income
ROS
1,193.2
633.9
128.6
430.6
%36.1
)16.6(
414.0
3.1
417.1
34.5
382.6
1,465.3
892.9
137.6
434.7
%29.7
)16.1(
418.6
1.9
420.6
38.2
382.3
1,687.4
1,045.9
118.9
522.6
%31.0
)15.9(
506.8
)19.7(
487.1
45.4
441.7
1,867.5
1,162.7
143.5
561.3
%30.1
)15.5(
545.8
23.5
569.4
46.2
523.1
2,135.9
1,346.1
138.0
651.8
%30.5
)18.5(
633.3
20.6
653.9
46.2
607.7
Balance Sheet (SAR mn)
2010
2011
2012
2013
2014
Cash and marketable securties
Accounts Receivables
Inventory
Others
Total ST Assets
760.8
303.2
52.5
24.3
1,140.9
655.1
563.9
65.5
30.2
1,314.7
1,022.1
309.9
73.3
61.4
1,466.7
882.8
419.1
76.6
68.6
1,447.1
676.9
553.4
86.8
154.3
1,471.4
Net Fixed Assets
Projects Under Implementation
Total LT Assets
Total Assets
67.3
0.0
67.3
1,208.1
96.3
13.5
109.8
1,424.5
88.5
1.6
90.0
1,556.8
91.0
7.1
248.3
1,695.4
191.5
341.7
1,813.0
89.5
155.8
54.4
299.6
115.6
177.0
56.3
348.8
151.6
176.4
61.6
389.6
146.0
211.2
67.2
424.4
172.0
241.1
50.4
463.6
84.9
823.7
1,208.1
94.6
981.0
1,424.5
105.4
1,061.7
1,556.8
112.4
1,158.6
1,695.4
123.8
1,225.7
1,813.0
Cash Flow Statement (SAR mn)
2010
2011
2012
2013
2014
Operating Cash Flow
Financing Cash Flow
Investing Cash Flow
Change in Cash
Ending Cash
682.3
)24.0(
)13.1(
645.2
760.8
214.3
)261.3(
)58.7(
)105.8(
655.1
786.2
)409.2(
)20.2(
356.8
1,022.1
500.4
)467.0(
)162.5(
)129.0(
882.8
487.1
)584.1(
)108.9(
)205.9(
676.9
Income Statement (SAR mn)
Accounts Payable
Accrued Expenses
Others
Total ST Liabilities
Other Non-Current liabilities
Equity
Total Liabilities and Equity
Presentation of financial statements may differ from the company’s presentation. However, there is no impact on the final results.
2
Catering
Agriculture & Food Industries Sector
CATERING AB - 6004.SE
27 January 2015
Albilad Capital Rating Methodology
Al-Bilad Capital uses its own evaluation structure, and its recommendations are based on quantitative and qualitative data collected by the analysts.
Moreover, the evaluation system places covered shares under one of the next recommendation areas based on the closing price of the market, the fair
value that we set and the possibility of ascent/descent.
Overweight:
The Fair Value exceeds the current share price by ≥ 10%. We expect the share price to reach the Fair Value over the next 9-12
months
Neutral:
The Fair Value is either more or less than the current share price by < 10% We expect the share price to reach the Fair Value over
the next 9-12 months
Underweight:
The Fair Value is less than the current share price by ≥ 10%. We expect the share price to reach the Fair Value over the next 9-12
months
To be Revised: No Fair Value had been set for one or more of the following reasons: waiting for more analysis, waiting for detailed financials ,
waiting for more data to be updated, major change in company`s performance, change in market conditions or any other reason
from Albilad Capital Research.
Albilad Capital
Client Services
E-mail:
clientservices@albilad-capital.com
Tel:
+966-11-203-9888
Toll-free: 800-116-0001
Research & Advisory
E-mail:
research@albilad-capital.com
Tel:
+966-11-203-9892
Website: www.albilad-capital.com/en/research
Brokerage
E-mail:
Tel:
myabes@albilad-capital.com
+966-11-203-9840
Asset Management
Investment Banking
E-mail:
Tel:
E-mail:
Tel:
falqutub@albilad-capital.com
+966-11-203-9870
mmandil@albilad-capital.com
+966-11-203-9830
Disclaimer
AlBilad Capital exerted utmost efforts to ensure that the information included in this report is accurate and correct. However, AlBilad Capital Co., its managers, and staff
bear no liability whether explicitly or implicitly for the content of the report and no legal responsibility, whether directly or indirectly, for any results based on it.
This report should not be reproduced, redistributed, or sent directly or indirectly to any other party or published in full or in part for any purpose whatsoever without a
prior written permission from AlBilad Capital.
We would also like to note that this information in no way constitutes a recommendation to buy or sell banknotes or make any investment decisions.
Any investment act taken by an investor based fully or partially on this report is the complete responsibility of the investor.
This report is not meant to be used or seen as advice or an option or any other measure to be taken in the future. We recommend consulting a qualified investment advisor before investing in these investment tools.
AlBilad Capital preserves all rights associated with this report.
3