PETALING JAYA, March 8 — Celcom Axiata Bhd expects to achieve single-digit growth in total revenue in 2019 despite a flattish 2018 for the telecommunications industry. Chief executive officer Idham Nawawi said although the company may not…
PETALING JAYA: Malaysian banks’ asset risks will rise in 2019, as business conditions deteriorate for export-oriented sectors, said Moody’s vice-president and senior analyst Simon Chen.
“Profitability will also fall, as revenue growth slows and credit costs rise. Nevertheless, the banks’ capital buffers will further improve, due to slower asset growth; thereby helping the banks withstand the higher asset risks,” he said in a statement today.
The expected weak export-oriented sectors, particularly electronics, construction and real estate, is attributable to a slowdown in global trade and weaker economic growth.
However, Moody’s said this will not result in a sharp increase in impaired loans, with robust domestic consumption and stable employment conditions supporting asset quality.
Systemwide loan growth grew to 5.6% in 2018 from 4.1% in 2017, because of a gradual recovery in loan demand among corporates and households, partially as a consequence of the removal of a goods and services tax.
For 2019, the loan growth rate is expected to fall back to about 4-5% in 2019, as slower economic growth and uncertainty around the new government’s longer-term policy stance suppress loan demand among businesses and households.
Most Malaysian banks rated by Moody’s reported improvements in asset quality and capitalisation in 2018 but profitability was mixed.
Although profitability will weaken this year, the rating agency said capital generation will continue to outpace capital consumption due to weaker loan growth, leading to further rises in capital ratios. At the same time, deposit growth will continue to outpace loan growth as banks prepare for net stable funding ratio implementation.
The impaired loan ratios of most Moody’s rated Malaysian banks fell at the end of 2018 on the back of the slower formation of new impaired loans at home and overseas, loan repayments and write-offs.
PETALING JAYA: AmBank Research has maintained a “neutral” call on the telecommunications sector given the continued intense competition in both the mobile and fixed broadband markets.
“We have ‘hold’ calls on Axiata Group Bhd, Telekom Malaysia Bhd (TM) and Digi.com Bhd while Maxis Bhd is underweight due to its premium valuations despite its FY19 guidance for an ebitda decline amid additional capex for fiberised solutions, digitalisation and productivity capabilities,” the research house said in report today.
It said the telco sector’s Q4 18 results were somewhat mixed as normalised earnings of Digi and Axiata came in within expectations while TM did not suffer a profit erosion as bad as it had expected from the Mandatory Standard Access Pricing regime and repriced Unifi options.
Time dotcom Bhd’s results were stronger than expectations with its H2 earnings coming in above management’s guidance due to continued fixed broadband growth in the wholesale, retail and enterprise markets. Maxis underperformed due to additional costs for productivity enhancement and marketing for its fiberised solutions targeting the enterprise segment.
AmBank Research said as Communications and Multimedia Minister Gobind Singh Deo recently indicated that high-speed broadband prices will not be cut this year, TM earnings prospects have stabilised for now with around 90% of TM’s Streamyx and Unifi existing customers having been upgraded to faster speed packages while experiencing minimal downtrading activities together with manageable revenue declines in FY18.
Cellular operators’ (celco) Q4 18 net profit fell 30% quarter-on-quarter (q-o-q) and year-on-year (y-o-y) to RM790 million largely even though revenue improved, up 1% q-o-q and 5% y-o-y, from higher average revenue per user (ARPU) and postpaid subscribers for Celcom and Digi. The lower bottom line stemmed from a 6 percentage-point q-o-q decline in net profit margin to 13% from Maxis’ additional marketing/operational costs and Celcom’s higher depreciation and tax charges.
Digi continued to command the largest subscriber market share at 37% versus Maxis’ 34% while Celcom remained a distant third at 29%.
Since the middle of 2018, no celco has launched a comparable package to counter U Mobile’s prepaid GX30 which offers unlimited data with speeds up to 3Mbps for just RM30/month. Recall that U Mobile also launched postpaid GX50 which provides unlimited voice and data with speeds up to 5Mbps for RM50/month.
“Even though there appeared to be a half-year cease-fire in the postpaid wars, near- to medium-term revenue growth outlook remains weak against the backdrop of persistent pressure to gain market share.
“As U Mobile and Unifi mobile wrestle for new customers on the unlimited mobile data arena, prospects for incremental service revenue accretions are unexciting at this stage, underscored by the sector’s tepid forward momentum over the past years,” said AmBank Research.
KUCHING: Ranhill Holdings Bhd’s (Ranhill) net profit of RM45.5 million for the financial year 2018 (FY18) met expectations, despite the one-off impairment of its 26.7 per cent stake in Tawau Green Energy (TGE) in the fourth quarter of 2018 (4Q18). The research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) pointed out that the […]
KUALA LUMPUR, Feb 28 — Malaysia Airports Holdings Bhd’s (MAHB) net profit surged 203.35 per cent to RM727.30 million in the financial year ended Dec 31, 2018 versus RM239.75 million in 2017 due to, among others, unrealised gain on the fair value…
KUALA LUMPUR: Malayan Banking Bhd (Maybank) registered its highest ever net profit of RM8.11 billion for the financial year ended Dec 31, 2018 (FY18) from RM7.52 billion a year ago, mainly underpinned by higher loan growth, lower overheads as well as lower provisioning.
Its FY18 revenue increased 3.8% to RM47.32 billion from RM45.58 billion previously.
Net profit for the fourth quarter, meanwhile, grew 9.1% to RM2.33 billion from RM2.13 billion in the same quarter a year ago, with revenue expanding 3.8% to RM12.23 billion from RM11.79 billion.
The bank has proposed to declare a final dividend of 32 sen per share for the quarter under review.
Together with the 25 sen interim dividend declared earlier, the full-year dividend payout of 57 sen per share amounts to RM6.3 billion or 77.3% of net profit.
The total dividend payout translates into a higher dividend yield of 6% versus 5.6% in 2017.
In 2018, Maybank achieved record net operating income of RM23.63 billion, up 1.7%, on the back of a 3.1% increase in fund-based income as a result of higher contributions from all business sectors and key home markets.
Group gross loans expanded at a faster pace of 4.8% in FY18, compared with 1.7% previously. The Malaysian operations saw loans expanding 4.8%, Singapore 4.5%, Indonesia 7.0% and 10.9% for other international markets.
Maybank highlighted that its net impairment losses for the year coming in 20.5% lower than the previous year, lifting operating profit by 9.3% to RM10.8 billion in 2018.
For the fourth quarter alone, it saw net impairment losses coming in 58.1% lower than in the preceding quarter.
The bank continued to maintain a healthy liquidity position with its liquidity coverage ratio of 132.4% and loan-to-deposit ratio of 92.7%.
Total capital ratio was 18.51% while its fully loaded common equity tier 1 ratio stood at 14.51%, both well above the regulatory requirements of 8.0% and 4.5% respectively.
Maybank group president and CEO Datuk Abdul Farid Alias anticipates external headwinds to continue to create uncertainties in the market, and expects the bank’s loan growth to grow in line with the market expansion of 5.1% this year.
Nevertheless, he said the competition for deposits could place pressure on the bank’s net interest margins (NIMs) this year.
“We compressed about three basis points (bps) in 2018, so we expect (NIM compression) around three to five bps (in 2019),” he said at a press conference today.
The bank’s NIM was marginally lower at 2.33% in FY18, from 2.36% in FY17.
Moving forward, Farid said, the bank remains cautious over the global operating environment given continued geopolitical concerns as well as volatility in commodity prices, although it expects greater stability in the domestic market arising from measures being put in place to ensure sustainable growth.
Asked whether the bank will be able to maintain last year’s revenue growth, Farid said it will depend on the business sentiment, noting that within the domestic market, the consumer market is still robust despite the external headwinds.
He said: “2018 was a very difficult year for the market. Last year, the challenge for us is more on the non-retail site, apart from SMEs. We hope that the business sentiment will turnaround this year.
“But I believe for that to happen, we need to understand what is the long-term economic policy is going to be going forward. So I’m quite hopeful with the setting up of the new Economic Action Council,” he added.
PETALING JAYA: 7-Eleven Malaysia Holdings Bhd’s net profit for the financial year ended Dec 31, 2018 (FY18) rose 2.4% to RM51.31 million from RM50.11 million a year ago, driven by higher profit contribution from most product categories and higher marketing income.
In a filing with Bursa Malaysia, the group said its gross profit improved by 5.4% from a year ago mainly due to the revenue growth and gross profit margin expansion of 1.4% points. However, other operating income fell 68.9% year-on-year.
Revenue for the year rose 1.3% to RM2.22 billion from RM2.19 billion a year ago, underpinned by growth in new stores, improvement in same-store sales and consumer promotion activity.
For the fourth quarter ended Dec 31, 2018, 7-Eleven’s net profit fell 21.3% to RM12.49 million from RM15.86 million a year ago due to lower other operating income, despite higher revenue, gross margin improvement and higher marketing income.
During the quarter, gross profit rose 5.6% year-on-year due to higher revenue and improvement in gross margin by 1.5% points. The improvement in gross profit was due to higher gross profit margins across most categories boosted by marketing income.
Other operating income fell 81.9% due to compensation income from vendors of RM7.5 million in the previous year. Selling and distribution expenses for the quarter rose 6.2% due to new store expansion resulting in higher staff related costs and rental costs.
Revenue for the quarter rose 1.5% to RM554.26 million from RM546.24 million a year ago driven by growth in new stores, higher average spend per customer and better consumer promotion activity.
Moving forward, 7-Eleven expects trading conditions to improve, driven by domestic demand and anticipated heightened consumer sentiment.
The group plans to continue refreshing the 7-Eleven brand in the mind of customers through innovations in promotions, products and pricing.
PETALING JAYA: UEM Sunrise Bhd registered a net profit of RM20.08 million for the fourth quarter ended Dec 31, 2018 compared with a net loss of RM50.95 million a year ago in line with higher revenue, lower operating expenditure and favourable share of associates and joint ventures.
In a filing with Bursa Malaysia, the group said that the operating loss recorded a year ago was due to higher operational expenditure including the marketing and promotional expenses incurred for new launches, Mayfair and Solaris Parq during the third quarter last year.
Revenue for the quarter more than doubled to RM752.79 million from RM303.29 million a year ago thanks to the partial settlement of Conservatory and Aurora Melbourne Central, and completion of Kimlun land disposal.
The contribution from international revenue cushioned the impact of lower revenue from domestic projects derived from Residensi Astrea, Kiara Kasih and Solaris Parq in the central region as well as Serimbun and Aspira Park Homes in the southern region that are still at early stages of its development cycle.
For the financial year ended Dec 31, 2018 (FY18), UEM Sunrise’s net profit more than doubled to RM280.33 million from RM105.57 million a year ago on the back of strong revenue growth, development cost savings and contribution from non-strategic asset divestment.
Meanwhile, revenue for the year rose 9.9% to RM2.04 billion from RM1.86 billion a year ago.
Property development activities accounted for 70% of the group’s total revenue, with 46% from international projects, 30% from southern region and 24% from central region.
The group also recognised land disposal amounting to RM457.4 million and unbilled sales stood at RM4.4 billion as at Dec 31, 2018.
UEM Sunrise raked in RM1.43 billion worth of property sales last year, exceeding its RM1.2 billion sales target. Most of the sales were from domestic projects with 14% from projects in Melbourne. The group launched projects with total gross development value (GDV) of RM907.9 million last year.
Managing director and CEO Anwar Syahrin Abdul Ajib said the group aims to launch projects with a total GDV of RM1.2 billion this year, focusing on mid-market and reasonably sized pocket launches in mature locations. Its sales target for the year is RM1.2 billion.
It started the year with the launch of Aspira ParkHomes, 162 units of mid-market double-storey homes with GDV of RM101.8 million in Gerbang Nusajaya with further phase planned in the second half of the year.
He said asset divestment will remain one of its key strategies, with land disposal totaling RM457.4 million undertaken in Iskandar Puteri. It has earmarked several non-strategic assets for divestment this year amounting to RM300 million.
KUCHING: Ibraco Bhd (Ibraco), one of the leading realty developers in Sarawak, recorded a significant increase of 47.18 per cent in revenue at RM83.95 million for the fourth quarter ended December 31, 2018 (4QFY18). This compares favourably to RM57.04 million recorded in the preceding year’s corresponding quarter (4QFY17). Subsequently, both profit before tax (PBT) and […]
KUALA LUMPUR, Feb 22 — Axiata Group Bhd is allocating RM6.8 billion in capital expenditure (capex), mainly to modernise the group’s network and towers expansion. President and group chief executive officer Tan Sri Jamaludin Ibrahim said about…