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Results Note – Maxis (ADD, maintain) - 2Q13 core earnings lifted by margin improvement




Affin Hwang Investment Bank Bhd


06 Aug 2013





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1H13 core net profit down 2.3% yoy – inline Maxis’ 1H13 core net profit of RM1.08bn (-2.3% yoy) was impacted largely by a slightly lower EBITDA margin of 50.4% (1H12: 50.7%), higher interest charges (+9.3% yoy) and a higher effective tax rate of 28.2% (25.6% in 1H12). Results were nonetheless inline with expectations – 49% of our FY13 estimate (50% of street). Worth noting is that 1H13 EBITDA margin is above management’s guidance of 48% and our FY13 forecast of 48.1%. Should management sustain their cost discipline, there could be room for earnings surprise in 2H13. However, we note that 1H13 effective tax rate of 28% is above our forecast of 26%. At the revenue level, 1H13 revenue growth of +4% is slightly behind management’s KPI revenue growth of mid-single digit. We leave our forecast unchanged for now (our EPS revision takes into account the one-off items). As usual, Maxis announced an 8 sen interim DPS (1H13: 16 sen), inline with expectations.

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