dividend yield


Maxis earnings up 4.2% to RM523m in first quarter

PETALING JAYA: Maxis Bhd saw its net profit rise 4.18% to RM523 million in the first quarter ended March 31, from RM502 million in the previous corresponding quarter.

Revenue for the quarter declined 5.8% to RM2.2 billion, compared with RM2.4 billion in the same period last year.

“We delivered a steady quarter with solid earnings before interest, tax, depreciation and amortisation (ebitda) and high ebitda margin in a highly competitive market,” its CEO Robert Nason said in a statement.

Year-on-year (y-o-y), Maxis’ normalised profit after tax (PAT) was stable at RM510 million on the back of solid ebitda. Its normalised ebitda continued to be stable at RM1 billion.

Meanwhile, ebitda margin (on service revenue) was high at 51.5% against 49.3% last year, reflecting positive results from cost optimisation initiatives.

The group’s service revenue was marginally lower at RM2 billion from RM2.1 billion a year ago due to intense competition, particularly in the prepaid market.

Postpaid revenue grew 5.2% y-o-y to RM985 million from RM936 million last year, registering the highest shared line acquisition and increased average revenue per account (Arpa) through mobile and fixed offerings.

“This was supported by high monthly postpaid Arpu of RM92 and our flagship MaxisONE Plan (MOP) which continued to attract high-value subscribers. MOP registered 283,000 new additions y-o-y, bringing the total base to two million customers,” it noted.

Maxis’ prepaid revenue softened to RM849 million from RM1 billion last year due to lower subscription base, driven by aggressive price competition, continued SIM consolidation and migration to postpaid.

Nevertheless, the group said it continued to sustain high Mobile Internet (MI) penetration of 73%, which supported its high prepaid Arpu of RM41 per month.

Maxis has declared an interim dividend of five sen a share for the financial year ending Dec 31, to be paid on June 28.

In a note today, AmInvestment Bank Bhd said it is maintaining its “hold” call for the group with an unchanged discounted cash flow derived fair value of RM5.76 per share.

It said this was based on a weighted average cost of capital discount rate of 7% and a terminal growth rate assumption of 2%.

“The stock’s FY18 enterprise value/ebitda of 11 times is almost at parity to its three-year average, while dividend yields are decent at 3%,” it noted.

Pending an analyst briefing, AmInvestment said its forecasts are maintained as Maxis’ Q1’18 normalised net profit of RM510 million came in generally within the firm and consensus expectations.

“Unlike Digi.Com which recently registered a 10% increase in Q1’18 net profit from the adoption of MFRS 15 on device subsidy and sales commissions, Maxis’ results appear to be adversely impacted, with Q1’17 normalised net profit slightly adjusted down by 1% while revenue rose 10%,” it said.

Post-MFRS 15 adoption, it said management is now guiding for FY18 service revenue to decrease by a mid-single digit decline versus an earlier low single digit and for ebitda to decline by a high single digit versus mid-single digit.

This includes expectations for higher spectrum fees from the 2,100MHz and 700MHz bands, it added.

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