Maxis Jan-Sep results ahead of forecast

Oct 20, 2016
Menara Maxis tower at KLCC, Kuala Lumpur.
Menara Maxis tower at KLCC, Kuala Lumpur.

Maxis Bhd’s results for the nine months ended Sept 2016 were ahead of Maybank Investment Bank’s forecasts on the back of lower depreciation, but in line with consensus.

It said on Thursday revenue trends remain relatively healthy, and Maxis remains on course for a 20 sen dividend per share (DPS) in 2016.

“Maintain Hold with an unchanged target price of RM5.80. Risk-reward remains relatively balanced in our view,” it said.

Maybank Research said Maxis’ 3Q16 core net profit of RM510mil (+5% on-year, +21% on-quarter) brings 9M16 core net profit to RM1.405bil (+2% on-year), representing 83%/74% of its/consensus full-year forecasts.

It was mainly due to lower depreciation (accelerated depreciation is tapering as the network modernisation exercise approaches completion), according to The Star Online.

Maxis’s 9M16 normalised EBITDA of RM3.276bil (flat on-year was 76%/75% of its/consensus full-year forecasts.

“We are unconcerned by Maxis’ subscriber loss (-188,000 prepaid, -15,000 postpaid) in the quarter. Prepaid saw a major uplift in ARPU (+6% on-quarter), which meant the churn consisted mainly of low-value and/or unprofitable IDD subscribers.

“Postpaid saw a mild ARPU decline (-1% on-quarter) possibly due to down-trading (recall Maxis raised data quota across the board for free).

Following an exceptionally low 2Q16, EBITDA margin rebounded 4.9ppt to 52.2% in 3Q16 as direct costs normalised.

“Management still expects to maintain absolute service revenue, EBITDA and capex guidance for FY16. We raise our 2016/17/18 net profit forecasts by 4%/3%/2% respectively as we lower our depreciation assumptions,” it said.

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