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Results Note – Axiata (REDUCE, maintain) - A sweetener for margin pressure




Affin Hwang Investment Bank Bhd


21 Feb 2013





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FY12 core profit up 5.6% yoy – inline. Surprises with 12 sen special DPS Axiata’s FY12 core net profit of RM2.7bn (+5.6% yoy) was inline with expectations, and earnings growth was driven primarily by revenue growth of +8.4% yoy to RM17.7bn. This continues to be underpinned by subscriber growth (+8.3% yoy) and higher data revenue (+29% yoy). FY12 EBITDA margin was however under pressure and lower at 42.6% vs 44.6% for FY11, primarily due to accelerated investment in data networks particularly in Indonesia. A change in SMS interconnect regime and price pressure also resulted in XL’s lower EBITDA margin of 45.8% in FY12 vs 50.6% in FY11. Note that XL contributed 44% of group FY12 EBITDA. Axiata announced an interim DPS of 15 sen, bringing FY12 DPS to 23 sen. Simultaneously, Axiata surprised with a special DPS of RM1bn or 12 sen/share. Management however guided that the special DPS is likely to be one-off, but the group’s dividend payout ratio is to progressively rise.

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