Time dotCom’s (TDC) 9MFY12 core earnings were slightly above our/consensus estimates by 3%/5% respectively. Its 9M core earnings surged 49% y-o-y due to: i) contributions from its recently acquired companies, ii) higher IRU sales, and iii) bumper dividends from DiGi. To our surprise, its EBITDA margin also improved, ticking up 210bps y-o-y. Overall, we are impressed with its YTD numbers, and expect more stellar results in 4Q given that DiGi declared a 12 sen interim/special dividend in 3Q. Maintain BUY, although our FV and financial forecasts are under review, pending the company’s conference call later today.
Slightly above expectations. TDC’s 9MFY12 core earnings were slightly above expectations, making up 78%/79% of our/consensus full-year estimates. The group’s 9M revenue grew by a commendable 29% y-o-y, while its core bottom-line surged 49% y-o-y. The strong financial performance was mainly attributed to: i) contributions from its recently acquired companies, ii) increased IRU (Indefeasible Rights of Use) sales, and iii) bumper dividends obtained from DiGi for the past three quarters. Meanwhile, its 9M EBITDA margin expanded 210bps y-o-y but 3Q’s core earnings contracted 3% q-o-q on higher depreciation and financing expenses. Notably, the 3Q EBITDA margin slipped 230bps, coming off a high base in 2Q (lower IRU sales). Other takeaways were:
Slightly above expectations. TDC’s 9MFY12 core earnings were slightly above expectations, making up 78%/79% of our/consensus full-year estimates. The group’s 9M revenue grew by a commendable 29% y-o-y, while its core bottom-line surged 49% y-o-y. The strong financial performance was mainly attributed to: i) contributions from its recently acquired companies, ii) increased IRU (Indefeasible Rights of Use) sales, and iii) bumper dividends obtained from DiGi for the past three quarters. Meanwhile, its 9M EBITDA margin expanded 210bps y-o-y but 3Q’s core earnings contracted 3% q-o-q on higher depreciation and financing expenses. Notably, the 3Q EBITDA margin slipped 230bps, coming off a high base in 2Q (lower IRU sales). Other takeaways were:
- The wholesale segment posted 3Q/9M revenue growth of 42%/28% y-o-y, afterincorporating five-month financial contribution from Global Transit Entities.
- The 3Q/9M top-line of its enterprise segment surged 48%/31% y-o-y afterassimilating AIMS Group into the division.
- The consumer & SME segment’s 3Q/9M revenue climbed 15%/18% y-o-y.
Maintain BUY. Forecasts and FV under review. Overall, we are pleased with the company’s 9M financial performance and remain optimistic on its outlook. We expect more robust results for 4Q as DiGi declared a 12 sen interim/special dividend in 3Q, which will translate into a dividend income of RM33m. With that, we are retaining our BUY recommendation but keeping our forecasts and FV under review, pending the company’s conference call later today.
Source: OSK
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