Market Talk (EEI, AP, ICT)

Construction: EEI FY13 earnings down 6.4%. EEI Corp (EEI - BUY) posted FY13 net income of PHP915.7m, down 6.4% YoY but higher 2% if we exclude one-off recovery amounting to PHP79.9m in FY12. This is 10% higher than our FY13 estimate and 12% better than consensus forecast. Revenues went down 23% as domestic construction fell 8.8% while services plunged 71.7%. EEI attributes the decline from delays in production due to adverse weather conditions and completion of several projects. Equity in net earnings from its 49% JV with Al Rushaid Construction Co (ARCC) in Saudi Arabia came in higher than expected as it rose 22.7% to PHP529m. EEI ended the year with PHP28.04b order book, up 37% YoY. We shall provide more details later.

Utilities: AP unit wins bid for 153.1-MW Naga complex. A unit of Aboitiz Power Corp (AP - HOLD) has reportedly won the bid for the 153.1-MW Naga power plant complex in Cebu. The auction was the third for the Power Sector Assets and Liabilities Management Corp (PSALM), after two failed attempts last year after only one firm participated in both auctions. As reported by the Businessworld, the notice of award was issued to Therma Power Visayas last 30 April. Therma Power submitted a bid of PHP1.09b compared with the PHP859m tendered by its lone competitor SPC Power Corp (SPC - Not rated). The turnover of the power plant will happen upon PSALM’s receipt of payment for the asset. The Naga power complex consists of three power plants: the 52.5 MW Cebu 1 and 56.8-MW Cebu 2 coalfired thermal power plants and the 43.8-MW Cebu palnt, which consist of six 7.3-MW diesel-fired power plants.

Ports: ICT wins 26-year contract in Australia. International Container Terminal Services, Inc (ICT–HOLD) through its 90%-owned subsidiary Victoria International Container Terminal Ltd (VICTL), won a 26-year expansion and operations contract for the Port of elbourne, the largest container and general cargo port in Australia. This involves design, construction, commissioning, operation, maintaining and financing of the Terminal and Empty Container Park (ECP) at Webb Dock East (WDE) in the Port of Melbourne. Total investment is estimated to reach USD508m. Phase 1 to start in 4Q14 and should be operational by Dec 2016. Phase 2 to become operational in Dec 2017. When fully developed, the Terminal will have 6 Post-Panamax Ship-to-Shore cranes and will be able to handle up to 1.4 million TEUs annually and the ECP will have a capacity of 280,000 TEUs.

-ATR