KUALA LUMPUR: Telekom Malaysia Bhd
's (TM) first half FY17 results were in line with expectations, with lower depreciation offsetting seemingly higher-than-expected wireless losses, says Maybank Investment Research.
TM's Q2FY17 core net profit of RM208mil was 24% higher on-year, bringing H1FY17 core net profit 18% higher on-year to RM438mil. This came to 54% and 51% of Maybank Investment Research's and consensus forecasts respectively.
According to the research house, the higher profit in the current period was due to accelerated depreciation in H1FY16.
"Relative to our forecasts, H1FY17 wireless losses (no longer disclosed) appear to be higher-than-expected, but this was offset by lower-than-eppected depreciation. 1H17 core EBITDA of RM1.86bil (-2% y-o-y) was 47% of our/consensus full-year forecasts. A 9.4sen interim DPS was declared," it said.
Unifi added 28,000 subscribers on-quarter with ARPU still elevated. On the flip side, Streamyx saw an accelerated loss of 39,000 subscribers on-quarter. On a cumulative basis, TM experienced a net loss of fixed broadband subscribers for the first time since the launch of Unifi.
Webe’s penetration among TM households climbed further to 5.6% in Q2FY17 from 4.2% in Q1FY17.
Maybank Investment Research maintains its Hold call with unchanged earnings forecasts and target price of RM6, derived from a DCF, assuming 7.5% WECC and 2% long-term growth.
"TM’s near-term earnings trajectory remains subdued with Webe possibly remaining EBITDA-negative in 2017-18," it said.
Limited time offer:
Just RM5 per month.
