Take Some Profits: PTT PCL (Thailand)


Thailand oil and gas company has provided handsome returns in the past year

Stock: PTT PCL (PTT:TB) 

PTT, a ฿1.2 trillion (Thai baht; $35.91 billion USD) Thailand oil & gas integrated company, has an attractive 4.3% dividend yield with 18% payout ratio.

PTT is 51%-owned Thailand Finance Ministry.

In PTT’s recent six months of operations that ended in June, PTT reported an impressive 22% revenue increase compared to its year prior operations to ฿988.6 billion and 58% rise in profits to ฿76.7 billion.

PTT recorded much higher other income (+฿12.7 billion year over year) and gains in foreign exchange (+฿5.72 billion) leading to much better overall profitability for the company.

As of June, PTT had ฿214.5 billion in cash and cash equivalents (+฿15.7 billion higher than a year earlier), and ฿583 billion in debt (-฿1.22 trillion lower than a year ago) having led to a debt-equity ratio of 0.73x vs. 0.87x a year earlier.

Overall equity also increased by ฿65.4 billion to ฿795.4 billion.

In the past three years, PTT allocated ฿400 billion in capital expenditures, raised ฿40.6 billion in share issuances, reduced overall debt (net issuances) by ฿230.3 billion, and provided ฿137.6 billion in dividends and repurchases representing 34% of its ฿400 billion in free cash flow.

Applying a conservative flat revenue growth multiplied with its recent PS multiple averages indicated a per share figure of ฿240.73 vs. ฿420 at the time of writing.

Having returned 27.32% this past year, investors should probably consider reducing their exposure to PTT (if any). Despite an attractive yield and low payout ratio, the company’s shares are a pass right now.

Disclosure: I do not have shares of any of the companies mentioned.

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