Cardig Aero Service not rated

Cardig Aero Service (CASS; Rp820; not rated)

 

Cardig Aero Service is a service company providing aviation support and food solution. Aviation support service range from ground and cargo handling and line maintenance, while food solution business serves remote area catering, in-flight catering and industrial area food service. It operates in 11 largest airports in Indonesia. The company also started integrated facility management solution early this year.

 

Key takeaways from the analyst meeting that we attended yesterday: 

• The ground and cargo handling business (where Singapore-based SATS owns 49% stake) still contributes to 73% of FY2012 revenue. The subsidiary currently serves 34 international carriers, 9 domestic carriers and 150 consigners. It controls 70% and 40% market share for ground handling and cargo handling, respectively. Revenue from this segment grew by 13% yoy mainly supported by increasing import volume and higher flight frequency.
• On line maintenance service (where SIA Engineering owns 49% stake), it controls 56% market share for international flight. Last year, it added Jet Star, Air New Zealand and Air Asia as new clients. Revenue from this segment contributes to 7% of FY2012 revenue and posted 30% yoy growth last year.
• Lastly on food solutions business (20% of FY2012 revenue), CASS posted more than double yoy revenue growth, supported by full year consolidation of food solution subsidiary in 2012. Coal contracting companies, like Pama and Buma, are the example of its remote catering clients. CASS also does in-flight catering business with 9,000 meals capacity. In addition, it is also setting up food production center in Karawang to tap into food solution service for industrial clients (it secured 3,000 daily meals order from Federal Oil early this month).
• Revenue and net earnings in 1q2013 were Rp301bn (29% yoy growth) and Rp28bn (41% yoy growth), respectively. 2013 capex is budgeted for Rp100bn. EBITDA margin for this company was 29% last year and ROE was at 36% level. Current market cap of the company is Rp1.7tn (US$175mn) with 6M ADTV of Rp350mn (US$36k). The company may be benefitted from increasing flight frequency, import volume and airport capacity expansion in Indonesia.

for Indonesia Market Summaries 22 May 2013