Period 9M12
for XL Axiata
Actual vs. Expectations
The 9M12 core NP of
Rp2.3T was below our expectations and accounted for 67.3% and 66.6% of ours and
the street’s full-year estimates, respectively.
Dividends No
dividend was announced during the quarter.
Key Result Highlights
The 9M12 revenue rose
14% YoY to Rp15.9T, driven by higher contribution from the SMS (+21%), Data
& VAS (+14%) and Voice (+7%) segments. With the growth in data, non-voice
revenue now contributed half of XL’s total usage revenue of Rp14.6T. The strong
data growth has led XL’s total data traffic to surge 144% to 16,337 TB. XL’s
data users now accounted for 60% of the group’s total subscribers of 42.3m with
most of the users committed to either the Pay Per Use or Volume based data
plans.
QoQ, the revenue was
up by +18% while core net profit rose slower than the top line to Rp761m (+11%)
as a result of a lower EBITDA margin (44.1% vs. 47.0%) due to higher network
costs.
The total operating
expenses, meanwhile, increased by 23% YoY to Rp8.3T in 9M12 due to higher infrastructure
expenses of Rp3.9T(+43% YoY) caused by the increase in rental sites, towers and
leased lines expenses as a result of a higher base stations rollout and higher
3G infrastructures.
The 9M12 EBITDA
increased by 6% YoY to Rp7.4T although the margin was lower at 46.6% vs. 50.3% a
year ago. The lower margin was mainly due to higher network costs related to
the expansion of data infrastructure to support data growth and SMS interconnection.
Outlook XL
Axiata is maintaining its targeted revenue to be within or above its peers’
expected growth in FY12 of 6.0%-8.0%. Meanwhile, while management said it is
keeping its guidance of an EBITDA targeted margin in the high 40% level, it is,
nonetheless, expecting the margin pressure to increase going forward as a
result of higher data contribution.
Change to Forecasts
No change in our
Axiata’s FY12-FY14 forecast for now, pending on the upcoming 3QFY12 result
which scheduled to release on 29 Nov.
Rating Maintained at MARKET PERFORM
Valuation Our
Axiata TP is maintained at RM6.33 based on a targeted EV/forward EBITDA of 7.7x
(+2 SD).
Risks Regulation risks in its overseas ventures.
Source: Kenanga
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