KUALA LUMPUR (June 26): Prolintas Infra Business Trust (KL:PLINTAS) fell on Wednesday, and was sharply below its initial public offering (IPO) price, after confirming the arrest of some of its directors by the anti-graft agency.
Units of Prolintas opened at 86 sen, down five sen or 5.5%, at 10am after a one-hour suspension. It then declined to as low as 81 sen, before closing the day 3.5 sen or 3.9% lower at 87.5 sen, valuing the trust at RM962.5 million on Bursa Malaysia. That compares with its IPO price of 95 sen just three months ago.
Prolintas Managers Sdn Bhd (PMSB), the trustee-manager for Prolintas, said the directors who had been remanded by the Malaysian Anti-Corruption Commission (MACC) were given leave of absence from Wednesday.
In a filing with Bursa, PMSB said business will continue as usual, with an interim executive management team led by Datuk Ikmal Hijaz Hashim, who has vast experience in the highway industry.
"The combined expertise of the said executive management team will ensure that the stewardship of the trust is continued smoothly. The board of PMSB is of the view that there will be no financial and operational impact on Prolintas' operations," PMSB said.
"PMSB continues to be committed to maintaining the highest levels of integrity and corporate governance," it added.
Dividend yield still attractive
At 87.5 sen, Prolintas’ dividend yield is close to 7%, based on Bloomberg’s estimated dividend of six sen per unit for the financial year ending Dec 31, 2024 (FY2024).
The street's forecast for FY2024 includes a revenue of RM302 million (versus RM309 million for FY2023), and earnings per unit of 1.80 sen (versus loss per share of 14.3 sen for FY2023), according to Bloomberg data.
As such, at the current level, the situation may present an opportune buy for investors.
In an initiation note in March, Affin Hwang noted that Prolintas holds four cash-generating highway concessions within the business trust, each generating consistent cash flows from toll collections.
“They have opted to inject the assets into a business trust instead of a traditional listing, as trust distribution is not affected by non-cash items such as amortisation, which reduce accounting profits.
“As such, distributions made will better match cash flows, which suits the stable cash-generation business of the toll highway concessionaire,” it added.
The house noted that Prolintas had pledged to distribute 90% of distributable income, which will be adjusted for various non-cash items.
“Based on our forecasts, we believe that this is sustainable, as the aggregate project free cash flow is sufficient to cover the distribution,” it added.