TM (4863) : Weaker revenues for Telekom Malaysia
KUALA LUMPUR: CIMB Equities Research said Telekom Malaysia’s core net profit for the third quarter ended Sept 30, 2014 (Q3, FY14) fell 10.5% on-quarter (-29.1% on-year) due to lower revenues across all business segments.
“The 9M14 earnings was at 70% of our and 66% of consensus FY14 estimates,” it said on Thursday, adding that the results were largely in line as “we expect a stronger 4Q14 but below consensus expectations”.
CIMB Research is keeping its FY14-16 earnings forecasts, which factors in dilution from P1 and 50% government grant for the high speed broadband-2 (HSBB-2).
“Our DCF-based target price remains at RM6 (WACC: 8.0%). Key de-rating catalysts are slowing broadband business growth and potential disappointment from its P1 acquisition,” it said.
CIMB Research maintained its Reduce recommendation for TM. For Malaysian telcos, it preferred Axiata Group.
Internet revenues fell 1.8% on-quarter (+4.1% on-year) in 3Q14 due to the cleanup of 90,000 delinquent Streamyx accounts, which resulted in net subscriber loss of 65,000.
For UniFi, net addition picked up slightly on-quarter to 27,000 (2Q14: 20,000, 3Q13: 30,000) due to more aggressive selling activities.
CIMB Research said voice, data and other revenues trended down as well Voice revenues fell 9.2% on-quarter(-9.0% on-year) affected by the cleanup of delinquent accounts.
On a normalised basis, voice revenues eased 3.2% on-quarter (-3.4% on-year) as there were no wholesale international capacity sold in the quarter. Data revenues fell 9.0% on-quarter (-7.7% on-year).
Excluding one-off next-generation backhaul revenues booked in 2Q14, data revenue was down 3.8% on-quarter. Other revenues fell 5.9% on-quarter (+31.7% on-year) due deferment of customer projects.
EBITDA margin improved by 1.2% points on-quarter (-0.9% pts on-year) to 33.2% in 3Q14. This was largely due to lower manpower cost because of a reversal of excess bonus provision in 3Q14, while 2Q14 had contained provision for unutilised carried forward leave.
Overall, CIMB Research forecast margins to decline to 32.4% in FY14 (2013: 33.1%) due to higher content, electricity and staff costs. Margin should further decline to 31.5%/31.1% in FY15/16 after factoring in the dilution from P1.
http://www.thestar.com.my
KUALA LUMPUR: CIMB Equities Research said Telekom Malaysia’s core net profit for the third quarter ended Sept 30, 2014 (Q3, FY14) fell 10.5% on-quarter (-29.1% on-year) due to lower revenues across all business segments.
“The 9M14 earnings was at 70% of our and 66% of consensus FY14 estimates,” it said on Thursday, adding that the results were largely in line as “we expect a stronger 4Q14 but below consensus expectations”.
CIMB Research is keeping its FY14-16 earnings forecasts, which factors in dilution from P1 and 50% government grant for the high speed broadband-2 (HSBB-2).
“Our DCF-based target price remains at RM6 (WACC: 8.0%). Key de-rating catalysts are slowing broadband business growth and potential disappointment from its P1 acquisition,” it said.
CIMB Research maintained its Reduce recommendation for TM. For Malaysian telcos, it preferred Axiata Group.
Internet revenues fell 1.8% on-quarter (+4.1% on-year) in 3Q14 due to the cleanup of 90,000 delinquent Streamyx accounts, which resulted in net subscriber loss of 65,000.
For UniFi, net addition picked up slightly on-quarter to 27,000 (2Q14: 20,000, 3Q13: 30,000) due to more aggressive selling activities.
CIMB Research said voice, data and other revenues trended down as well Voice revenues fell 9.2% on-quarter(-9.0% on-year) affected by the cleanup of delinquent accounts.
On a normalised basis, voice revenues eased 3.2% on-quarter (-3.4% on-year) as there were no wholesale international capacity sold in the quarter. Data revenues fell 9.0% on-quarter (-7.7% on-year).
Excluding one-off next-generation backhaul revenues booked in 2Q14, data revenue was down 3.8% on-quarter. Other revenues fell 5.9% on-quarter (+31.7% on-year) due deferment of customer projects.
EBITDA margin improved by 1.2% points on-quarter (-0.9% pts on-year) to 33.2% in 3Q14. This was largely due to lower manpower cost because of a reversal of excess bonus provision in 3Q14, while 2Q14 had contained provision for unutilised carried forward leave.
Overall, CIMB Research forecast margins to decline to 32.4% in FY14 (2013: 33.1%) due to higher content, electricity and staff costs. Margin should further decline to 31.5%/31.1% in FY15/16 after factoring in the dilution from P1.
http://www.thestar.com.my
