20120224 Axiata - 4Q11 Results

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20120224 Axiata - 4Q11 Results Empty 20120224 Axiata - 4Q11 Results

Post by Cals on Fri 24 Feb 2012, 11:26

Result


Below expectation - 4Q11 net profit came below expectation after dropping 7.6% QoQ to RM544.6m. Quarterly revenue was within forecast after rising 1.7% to RM4.26bn.
FY11 revenue was in line with expectation but full year net profit made up 86% of our full year forecast. Full year results also missed management’s KPI of 10% revenue growth (FY11: 5.3%) and 10.3% EBITDA growth (FY11: 1%).
Comment


Lower margins – Celcom’s 4Q11 normalised EBITDA margin fell 0.6pp to 44.1% due to competition and change in voice/data revenue mix. XL’s 4Q11 EBITA margin shed 0.2pp to 46.8%.
Hit by currency fluctuation – The strengthening RM reduced full year revenue growth by 2.2pp and EBITDA growth by 1.9pp.
Steady subscriber growth – Regional subscribers increased 25% YoY to 199.1m with Idea Cellular contributing 106.4m.
Growth in data revenue – FY11 voice revenue fell 2% YoY to RM9.11bn but was compensated by growth in SMS (7% YoY to RM2.4bn) and data (29% to RM2.83bn). This trend is observed in other telcos as well due to higher adoption of smartphones. In FY11, Axiata’s smartphone customer base increased by 51%.
Moderate growth in broadband – FY11 broadband revenue increased 21% YoY to RM770m while subscribers rose 9% to 937,000.
2012 KPIs - Management unveiled new targets including revenue growth of 5.3%, EBITDA growth of 1.8%, ROIC of 11.3% and ROCE of 8.9%.
Axiata also allocated RM4.4bn capex for network expansion with RM2.5bn earmarked for XL and RM1.1bn for Celcom.
Bumper dividend - Final dividend of 15 sen came as a surprise, lifting this year’s total dividend to 19 sen (3.7% yield). Management is aiming for 65% payout ratio for 2012. Axiata is in a favourable position after cash reserve increased to RM6.6bn.

Earnings Outlook/Revision


FY12 earnings revised downward - Following the lower-than-expected performance in FY11, we are lowering our FY12 revenue and earnings forecast by 3.4% and 16% respectively.

Valuation & Recommendation


Maintain HOLD with a lower target price of RM5.07 – We value Axiata at RM5.07 based on Sum Of Parts (SOP) valuation.

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20120224 Axiata - 4Q11 Results Empty Re: 20120224 Axiata - 4Q11 Results

Post by sun on Fri 24 Feb 2012, 18:11

++ pak
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