Mewah

Mewah: Results below expected. 3Q rev at US$1.1b +28.3% yoy -12.6% qoq, net profit $6.5m -69.0% yoy +7.8% qoq.

Group achieved sales volume of 893.5k MT. for the quarter -5.8% yoy, -8.9% qoq. For 9M11, sales volume of 2,731.1k M.T. was lower by 4.4% yoy. Operating margins per MT for the quarter were up at US$28.9 from US$23.1 which contributed to the profit increase despite lower volumes. Co achieved US$50.8 per MT last yr same period.

Better margins (up 53.4% qoq) at US$27.3 were mainly from the Bulk segment which contributed 74.3% of total sales volumes and 69.5% of total revenues. Consumer saw operating margins fall 17.5% per quarter at US$33.5. Consumer pack volumes remained strong +13% yoy +1% qoq likely due to reduction in margins to protect volumes and relationships. Consumer pack customers in West Africa postponed purchases in anticipation of falling prices and pressed for lower margins.

Co has guided that 4Q results should not show any dramatic improvement.

Nomura maintains Reduce with TP$0.50