Gallant

Gallant released its 4Q13/FY13 results; 4Q13 earnings grew 135% y/y to $40.4m, while revenue spiked 789% to $576.8m, mainly due to consolidation of its 71.5%-owned PT Indomobil Sukses Internasional Tbk (IMAS), while other business segments registered weaker sales. The group's industrial park rental revenue came marginally lower (-1%) at $9.5m from a drop in rental rates and occupancy; Utilities revenue maintained at $27.1m, although power consumption was lower in the Bintan Resorts; and Resorts revenue came in lower (-5%) at $5.3m on lower tourist arrivals into Bintan and increased competition in ferry services from the Singapore-Bintan Resorts route. Going forward, mgmt guided that the industrial park and utilities business have yet to fully recover and remains challenging, while electricity consumption remains depressed. Margins will be impacted with increasing labour cost, high fuel cost and potential surcharge on gas purchases. Meanwhile, the group remains cautious of weakening Indonesian Rupiah, potentially higher interest rate and generally slowing down in manufacturing activities.