Period 1Q12
Actual vs. Expectations
1Q12 core NP of
RM183m came in slightly above the street and our estimate due mainly to a lower
direct cost and a lower effective tax rate.
The NP effectively
made up 27.3% and 25.3% of ours and the street’s full year estimates respectively.
Dividends No
dividend was announced during the quarter.
Key Result Highlights
YoY, revenue rose by
11% to RM2.38b, driven by higher contribution from all its segments, i.e. Voice
(+3%), Data (+11%), Internet (+24%) and other telco related services (17%).
Reported EBITDA grew by 7% to RM783m although the margin dipped by 1.2pp to
32.4% mainly due to the higher direct and maintenance costs.
QoQ, turnover was
lower by 3% due to lower revenue from Data (-6%) and other telco related services
(-19%) but this was partially cushioned by the increase in the Voice (+3%) and
Internet (+4%) divisions. Despite the moderate drop in revenue, the core NP,
however, fell 58% due mainly to the absence of deferred tax income.
Unifi subscribers
grew by 34% QoQ to 316k in end-1Q12 with a blended ARPU of RM182 (-RM2 QoQ). To
date, Unifi’s subscribers have reached 365k on the back of 1.22m premises
covered in 81 exchange areas. This translates into a take-up rate of 30%.
Streamyx subscribership, on the other hand, dropped by 1.7% to 1.66m with a slightly
higher ARPU of RM79 (+RM1 QoQ).
Outlook No
change in its FY12 headline KPIs target (aiming 5.0% revenue growth and 32% in
its EBITDA margin).
Change to Forecasts
We have raised
FY12-FY14E core NP by 6%-8% to RM722m-RM849m after lowering 1) the direct cost
(from 19.5% to 18.5% as a % of sales) and 2) the effective tax rate (from 23%
to 15%).
Rating Maintain OUTPERFORM
Valuation In
tandem with the earnings upgrade, we have raised our TP to RM5.65 (from RM5.52 previously)
based on a higher FY12 targeted EV/forward EBITDA of 7.2x (+2 SD) from 7.0x previously.
Risks A
potential slowdown in broadband subscribers
Persisting margin
pressure.
Source: Kenanga
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