Higher contributions from Wessex Water for YTL Power

KUALA LUMPUR: YTL Power International Bhd could see a rebound in its financial performance in its fourth quarter of its financial year ending June 30, analysts say.

This was expected to be underpinned by a rise in contributions from Wessex Water in Britain as a 21% water tariff increase there takes effect.

YTL Power International’s nine-month year-to-date results that were announced last week were mostly below expectations, at 72% of forecasts by CGS International Research (CGSI Research) and consensus.

Despite an anticipated step up in the coming quarter’s contributions from Wessex Water, CGSI Research revised the group’s forecast net profits for this year down by 3% as weaker volumes are expected from YTL PowerSeraya Pte Ltd in Singapore.

Meanwhile, YTL Power’s third quarter’s results were below Maybank Investment Bank Research’s (Maybank IB Research) expectations on a more pronounced tapering of PowerSeraya’s earnings.

The research house continued to view YTL Power’s risk-reward balance favourably on undemanding valuations and potential re-rating catalysts ahead.

“We maintain our earnings estimates. Our sum of parts based target price is adjusted to RM4.18,” RHB Research said.