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


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%).

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.

“It cannot be said too often that in speculation and investment, success comes only to those who work for it”

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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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