Period 3Q12/9H12
Actual vs. Expectations The
9M12 core NP of RM2.1b was better than expectations and accounted for 79.9% and
79.0% of ours and the street’s full-year estimates. The higher core NP was
mainly due to the 1) higher turnover growth in its key operating companies; 2)
higher associates contributions and 3) a lower effective tax rate as a result
of tax credits from both Celcom and Dialog.
Dividends No
dividend was declared during the quarter.
Key Result Highlights
YoY, the revenue rose 8.6% to RM13.2b, driven by
higher contributions from all its key operating companies (“OpCos”). On a
constant currency basis, the revenue would have grown 12.2%. EBITDA grew 4.9%
but its margin dipped by 150bps to 42.1% mainly due to a one-off SIM tax in
Robi along with aggressive network roll-out costs in Indonesia to accommodate
data growth. The core NP, however, increased by 9.1% to RM2.1b thanks to higher
operational contributions from key OpCos but was partially offset by forex losses
in Indonesia and Sri Lanka, and a lower effective tax rate (23.1% vs.
27.5%).
QoQ, the turnover was
up 2.8% while the core NP grew by 1.7% as a result of higher operational costs
in both XL (higher interconnect fees) and Robi (one-off SIM tax). The EBITDA
margin fell to 40.6% vs. 43.5% in 2Q12.
Celcom continued to
perform with its 9M12 revenue surging by 8% YoY to RM5.7b, although this was at
a lower EBITDA margin of 43.0% vs. 43.6% in 9M11. Broadband grew 19% YoY to RM678m
with the total data (including SMS) and voice revenue growing 8% YoY each to
RM2.0b and RM3.7b respectively.
Outlook Axiata maintained its FY12 headline KPI
targets i.e. (i) Revenue +5.3% YoY, and (ii) EBITDA +1.8% YoY but had raised
its capex guidance to RM5.0b from RM4.4b previously.
Change to Forecasts
We have raised our FY12 (2.8%), FY13
(1.1%), and FY14 (1.3%) core NPs after fine-tuning and raising the associates'
contribution.
Rating Maintain MARKET PERFORM
Valuation We
have lowered our Axiata’s TP to RM6.10 (from RM6.33 previously) based on a
lower targeted +1.5 standard deviation (from +2SD previously as a result of
regulation headwinds ahead), which implied a FY13 EV/forward EBITDA of
7.5x.
Risks Regulation risks in its overseas ventures.
Source: Kenanga
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