Below expectations. 9MFY07/10 core net profit of RM94.3m (+7.2% yoy) was below our expectations, accounting for 55.8% and 67.3% of our and consensus full-year estimates respectively. We note that 3Q revenue was up 12.4% qoq and reflects the strong orders in hand, while gross margins were sustained at 20% vs. 2QFY10 of 22% also reflecting a relatively robust flow of jobs. However, pre-tax profits were dragged down by higher operating expenses. And while we still expect the 4Q to be stronger, we believe our revenue assumptions for FY10-12 are now overly optimistic.
Kencana Petroleum Bhd : A Disappointing Quarter - 29/6/2010
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