Period 3Q12/9M12
Actual vs. Expectations
The 9M12 net profit of RM137m
came in within expectations and accounted for 69.1% each of ours as well as the
consensus’ full year estimates, respectively. Note that the 4Q is traditionally
the strongest quarter in the financial year and typically accounts for about
30%-40% of the full year earnings based on the historical trend.
Dividends Announced a 3.0 sen second interim
dividend with an ex-date set on 7 December, bringing the YTD dividends to 6.0
sen. For the full financial year, we are expecting the group to declare a total
dividends of 11.0 sen.
Key Result Highlights
YoY, the 9M12 revenue increased
by 2% to RM1.22b thanks to the higher contribution from the Print (+2%), Radio
(+2%) and Outdoor (+10%) segments although this was partially offset by the
muted performance of the TV (-1%) division. The group’s PATAMI was up by 3% to RM137m
as a result of a higher associate contribution and lower financial cost due to
the earlier full MTN repayment of RM100m.
QoQ, the 3Q12 revenue was lower by 2% to RM436m as a result
of lower advertising revenues in the quarter. The Olympics event during the 3Q
appeared to have squared off perfectly against the EUFA EURO 2012 event in the
preceding quarter. The group’s EBIT margin, meanwhile, managed to climb by 40
bps to 19.4% as a result of the more stringent cost controls. The PATAMI
increased by 4% to RM59m as a
result of higher
margins coupled with the higher
associate contributions and lower effective tax rate.
Outlook Management continues to remain cautiously optimistic
about the adex outlook, although advertisers are now more cautious on their
adex spending due to the current external economic uncertainties.
Change to Forecasts Post the 9M12 results, we have raised
our FY12, FY13 and FY14 net profits marginally by 0.6%, 0.5% and 0.7% to
RM201m, RM213m and RM219m, respectively.
Rating Maintain MARKET PERFORM
Valuation Our TP is maintained at RM2.34 based on
an unchanged targeted FY13 PER of 13.4x (being the 5-year average forward
PER).
Risks The CY13 gross adex growth coming in
below our expectation of RM12.4b (+8% YoY).
Source: Kenanga
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