MPHB profit soars in Q4 on exceptional gains

PETALING JAYA: Multi-Purpose Holdings Bhd (MPHB) net profit increased 205.29% to RM260.14mil for the fourth quarter to Dec 31, 2011 on the back of a 2.18% increase in revenue to RM913.91mil.

The company has declared an interim dividend of 5 sen less income tax, which will be paid on March 30 to shareholders registered as at March 15.

The exceptional net profit for the period was due to exceptional gains derived from the sale of properties within the group.

Segmentally, gaming contributed almost 90% of MPHB revenue for the quarter at RM800.42mil. This was followed by financial services at RM62.79mil, corporate and others at RM47.59mil and stockbroking, at RM6.24mil.

However, on a pre-tax basis, the corporate segment and others was the biggest profit contributor at RM192.98mil due to exceptional gains. Gaming contributed RM84.07mil while the financial services and stockbroking divisions contributed RM12.48mil and RM4.05mil respectively.

For the full year, MPHB net profit increased 60.65% to RM482.03mil on the back of a 1.64% rise in revenue to RM3.54bil. So far, it has paid 10 sen in dividends.

As of the period, the company has RM1.04bil cash. It has short-term borrowings of RM53.9mil and long-term borrowings of RM2.11bil.



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Axiata set to garner interest after high dividend payout

PETALING JAYA: Axiata Group Bhd's surprisingly high dividend payout for the financial year ended Dec 31, 2011 (FY11) will be a catalyst for its stock, analysts said.

“What they have announced is better than we had expected, and will likely stir investors' interest,” an analyst with MIDF Research wrote in his report.

Axiata, a telecommunication services provider with regional presence, on Wednesday said the management had proposed a dividend payout of 19 sen per share for FY11, representing a 60% payout ratio, and doubled that of last year's 30%.

In addition, Axiata's management had raised its dividend guidance for FY12 to 65%, which analysts said would boost investor sentiment towards the stock.

“Despite a more challenging outlook, Axiata maintains that it has sufficient cashflow generation power to improve its dividend,” Maybank Kim Eng said in its report.

In general, Axiata's performance for FY11, when benchmarked against market consensus, was not surprisingly great hence, the dividend surprise was a welcome.

Raking in a net profit of RM2.34bil on revenue of RM16.4bil, which represented an increase of 32.5% year-on-year and 5.3% year-on-year, respectively, analysts said they were within expectations.

Benchmarked against its own targets, Axiata had even missed its headline key performance indicators (KPI) targets for FY11; it merely achieved around 5% growth in revenue and hit only a growth of 1% in earnings before interest, tax, depreciation and amortisation (EBITDA) compared with its KPI target of a 10% growth for both categories.

Following the failure to meet its FY11 headline KPI, the company had set lower headline KPI targets for FY12, that is, a 5.3% increase in revenue and 1.8% growth in EBITDA.

“The company is faced with increasing competition from other players and there is increasing pressure on its margin,” an analyst said. “Nevertheless, we think its FY12 headline KPI targets are achievable.”

Most analysts concurred.

MIDF analysts, in their reports, indicated that Axiata's FY12 headline KPI targets were conservative; hence it would not be too difficult for the company to achieve them.

Axiata closed at RM5.15 yesterday, representing a gain of six sen from the previous day.



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TM plans capital repayment

Its fourth-quarter net profit jumps 49.3% to RM598.3mil on higher revenue

KUALA LUMPUR: Telekom Malaysia Bhd (TM) has announced a 49% jump in fourth-quarter net profit and proposed a capital repayment of RM1.07bil, or 30 sen a share.

The exercise will lead to the par value of TM's share capital being reduced from RM1 to 70 sen per share, while the total number of shares would be unchanged at 3.577 billion.

From left: TM executive director/group chief financial officer Bazlan Osman, chairman Datuk Dr Halim Shafie and Zamzamzairani at the media briefing on the company’s FY11 results.

The proposed capital repayment, expected to be undertaken in the third quarter of this year, would be funded by the TM group's cash balance, which at Dec 31, 2011, totalled RM4.213bil.

“By returning equity to our shareholders, we are providing immediate value enhancement and improvement to the shareholders' long-term rates of return,” group chief executive officer Datuk Seri Zamzamzairani Mohd Isa said at a media briefing yesterday.

“The magnitude of the capital repayment was higher than what the market had anticipated,” Bloomberg reported, quoting OSK Research analyst Jeffrey Tan.

TM has also proposed a single-tier final dividend of 9.8 sen per share, payable in June, compared with 13.10 sen a year earlier.

Zamzamzairani said TM was committed to its dividend payout policy of RM700mil, or up to 90% of its normalised profit after tax and minority interest (Patami), whichever is higher.

For the fourth quarter of FY11, TM posted a net profit of RM598.3mil, up 49.3% year-on-year, on revenue that rose 5.5% to RM2.45bil from RM2.32bil previously.

Zamzamzairani said TM's higher net profit was mainly attributable to tight cost management and general improvement in revenue that was driven by the Internet and multimedia segments.

TM's normalised Patami for the fourth quarter stood at RM240.1mil, compared with RM238.4mil a year earlier. Earnings per share (EPS) stood at 16.7 sen, versus 11.2 sen previously.

For the full year, TM's net profit stood at RM1.19bil, marginally down from RM1.21bil in FY10. Revenue was at RM9.15bil compared with RM8.79bil a year earlier.

EPS was 33.3 sen, down from 33.9 sen previously, while the total dividend was 19.6 sen, down from 26.10 a year earlier.

The results showed TM had exceeded all its three headline key performance indicators (KPI) targets for FY11. Its full-year revenue growth of 4.1% beat its KPI target of 2.5%.

The margin for its normalised earnings before interest, tax, depreciation and amortisation (EBITDA) for FY11 was 33.5%, compared with its KPI target of 32%, while its customer satisfaction measure score of more than 70 was above not only its own headline KPI, but also the global telco average score of 67.

While the industry continues to face challenges that include global economic uncertainty, sector liberalisation, regulatory changes and an intensely competitive landscape, the business environment for TM in FY12 is expected to remain positive.

The company has set a revenue growth target of 5%, EBITDA margin of 32% and customer satisfaction measure score of 72, as its headline KPI targets for FY12.

Zamzamraini believe that Internet and multimedia as well as data segments would continue to drive the company's revenue growth, while the voice segment is likely to decline further, although at a slower rate.

“We are transforming from a legacy-based network towards becoming an information exchange', whereby we would be the catalyst for an enriched and integrated digital lifestyle,'' he said.

The ICT/Business Process Outsourcing (BPO) will be a key strategic focuses in FY12.

Meanwhile, TM continued to see improvement in its UniFi high speed broadband service in the fourth quarter. In terms of coverage, the company had rolled out the service to 1.16 million premises covering 78 exchanges and activated 236,501 customers. This represents a net addition of 43.9%, or 72,000 customers, from the preceding quarter.

Together with Streamyx, TM's broadband customer base grew from 1.71 million in FY10 to 1.92 million in FY11.

Zamzamzairani is confident TM's broadband customer base would continue to see strong growth in FY12. He expects the UniFi take-up rate to reach 400,000 by the end of the year.

TM shares ended yesterday up one sen at RM5.08.



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