Equity Analysis /

SBM Holdings: SBM HOLDINGS: FY 17 – Strong volume growth comes at a cost

    Rahul Shah
    Rahul Shah

    Head of Financials Equity Research

    Tellimer Research
    4 April 2018
    Published byTellimer Research
    Ramp-up in volumes dampened by margin pressure, rising operating costs. SBMH reported FY 17 net profit of MUR2.57bn (Table 2), +12% yoy and above Bloomberg consensus of MUR2.30bn (Exotix: MUR1.78bn). Strong balance sheet growth and higher non-interest income were offset by lower margins and higher operating costs. ROE improved to 10.5% from 10.0% in FY 16, driven by higher fee and trading income. Q4 17 net income of MUR711mn rose 29% qoq (+126% yoy). The key positive variance versus our estimates was stronger non-interest income (+29% versus Exotix), which has been boosted by the successful introduction of derivatives trading and hedging products.