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JKSB Quarterly Highlights_Alumex PLC (ALUM)_2QFY17

Strong earnings growth of 40.1% YoY for the quarter (2Q FY17)

While the revenue increased by 12.2% YoY, gross profits recorded a healthy growth of 24.9% YoY during the quarter with the support of a significant expansion in the GP margin from 29.1% to 32.4% which was mainly a result of lower raw material costs stemming from favourable movements in global aluminium prices. With only a small increase in opex, the improvement achieved at the GP level caused the EBIT margin to expand from 20.1% to 23.5%. Furthermore, the marginal reduction in net finance expenses and the drop in effective rate (24.5% to 21.6%) augmented bottom line growth. As a result, ALUM's net margin expanded from 14.4% to 17.9% and earnings increased by 40.1% YoY to Rs.196 mn during the quarter. We currently project ALUM's full year earnings to reach Rs.695 Mn in FY17E which translates to a PE Ratio of 8.6x at the current trading price. Furthermore, ALUM declared 2 dividend payments in FY16 that collectively amounted to an annual DPS of Rs.1.20 which translates to a dividend yield of 6.0%.