It said on Tuesday Telekom had also cut FY18 dividend payout to 40%-60% of net profit.
“The 3Q18 revenue was steady on-year as higher Internet/other revenue was offset by weaker voice/data revenue. Earnings before interest, tax, depreciation and amortisation (EBITDA) margin was up on-year,” it said.
CIMB Research maintained its Hold call with an unchanged discounted cashflow-based target price of RM2.50. This was 18 sen above the last traded price of RM2.32.
It said the 3Q18 EBITDA rose 4.7% on-year (+13.1% on-quarter) on higher margins. Core EPS jumped 30.9% on-year (+71.0% on-quarter), boosted by a small tax credit (3Q17: 29% effective tax rate).
The 9M18 core EPS was at 83%/87% of its/Bloomberg consensus FY18F forecasts (EBITDA:
“We deem this largely in line as 4Q18F earnings may be weaker due to broadband price revisions and normalisation of tax rates. Telekom cut its FY18 dividend payout to 40-60% of PATAMI (previously: RM700m or 90% payout, whichever higher),” it said.
The 3Q18 revenue was stable on-year and on-quarter on higher Internet & multimedia which were largely offset by lower voice and data revenue.
After five quarters of declines, unifi broadband ARPU rose 2% on-quarter due to new sign-ups for higher priced plans. unifi net adds were healthy at 44,000k on-quarter (+3.6%), while Streamyx subs fell a steeper 60,000 (-5.5%) on-quarter. Overall broadband subs declined 16,000 (-0.7%) on-quarter.
Telekom’s 3Q18 EBITDA margin increased 1.4% pts on-year to 31.6% while on-quarter, it rose 3.6% pts due to lower: 1) direct (decrease in network-related costs and cost reduction initiatives), 2)
maintenance and 3) marketing costs.
These were partly offset by the increase in supplies and material and other operating costs.