Sterling second-quarter performance by YTL Corp

PETALING JAYA: YTL Corp Bhd posted a 44.6% year-on-year jump in net profit to RM237.4mil for its second quarter ended Dec 31, 2011 compared with RM164.2mil a year earlier.

For the quarter under review, the well-diversified group's revenue increased 18.4% year-on-year to RM5.3bil.

Group managing director Tan Sri Francis Yeoh said the group continued to perform well due mainly to the “ongoing resilience of our multi-utility businesses in Malaysia, Britain and Singapore”.

“Our cement and multi-utility operations, which are the group's major contributors, continue to register sound performance,” he said in a statement.

For the six months ended Dec 31, 2011, YTL Corp recorded a 10.4% year-on-year jump in net profit to RM489.2mil while revenue increased 10.8% to RM9.87bil.

YTL Corp and its listed arms' financial year ends on June 30, 2012 (FY12).

Meanwhile, for the first half of FY12, YTL Power International Bhd's net profit grew 5.2% year-on-year to RM560mil while revenue rose 9.4% to RM7.7bil, due mainly to better performance of its merchant multi-utility businesses.

However, the division's YES mobile broadband operations registered a loss due mainly to the upfront implementation costs to build the 4G network for scale in order to cover the peninsula.

YTL Cement Bhd saw its net profit for the first half of FY12 grow by 8.8% year-on-year to RM167.9mil while revenue increased 12.2% to RM1.15bil due mainly to higher demand for cement in the construction industry and contributions from offshore subsidiaries.

YTL Cement is undergoing a de-listing process; as at Feb 21, the acceptances of the voluntary share exchange offer into YTL Corp's shares had resulted in YTL Corp, YTL Industries Bhd and persons acting in concert holding more than 90% of YTL Cement's shares.

The trading of YTL Cement's shares and irredeemable convertible unsecured loan stocks will be suspended from 9am on Feb 29.

On YTL Power, analysts said the company's results for the first half of FY12 were within expectations.

CIMB Research noted that YTL Power was keeping cash for mergers and acquisitions, for which it has a good track record.

“We believe YTL Power would eventually win the national 1Bestarinet smart school project. The project is worth RM300mil per annum over 10 years,” said CIMB Research.

Meanwhile, HwangDBS Vickers Research pointed out that YTL Power's dividend per share was lower quarter-on-quarter.

The research house said this was possibly because the company wanted to retain cash to fund increasing capital expenditure for YES, and potential investments in new power plants in Malaysia and overseas regulated assets.

YTL Power had declared a 1.875% or 0.9375 sen per share second interim dividend for FY12.



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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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Thai floods dent DRB-Hicom’s earnings, 3Q dn 27%

KUALA LUMPUR (Feb 24): DRB-HICOM BHD []’s net profit took a hit following the severe floods in Thailand, which saw its earnings falling 27.6% for the third quarter ended Dec 31, 2011, to RM79.57 million from RM110.10 million.

It said on Friday that its automotive division’s earnings were affected by the Thai floods which had caused supply constraints.

DRB-Hicom said revenue rose 5.6% to RM1.69 billion from RM1.60 billion a year ago.

Earnings per share were 4.12 sen compared to 5.69 sen. It declared an interim dividend of 2 sen per share for the quarter.

The group attributed supply constraints arising from the recent Thai floods for its lower revenue and profits.

“Nevertheless, DRB-Hicom with its diverse business background is ready to withstand the challenges thrown its way. Its services and property businesses will continue to provide the mitigating factors,” said its group managing director Datuk Seri Mohd Khamil Jamil.

For the nine months ended Dec 31, 2011, revenue dipped 1.01% to RM4.754 billion from RM4.806 billion, while net profits fell 31.3% to RM274.92 million from RM400.07 million.

On the outlook, DRB-Hicom said the group’s automotive sector was expected to be weaker, contributed by new stringent credit financing policies, stiff global and regional competition, volatility of foreign exchange rates and also supply disruptions of components caused primarily by Thailand flood. It expected normal production to resume in March 2012.



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Sarawak Oil Palms FY11 earnings up 60% to RM242m

KUALA LUMPUR (Feb 24): SARAWAK OIL PALMS BHD [] recorded a 60.35% increase in earnings to RM242.95 million in the financial year ended Dec 31, 2011 from RM151.51 million last year, boosted by higher sales and production of crude palm oil (CPO) and palm kernel.

It said on Friday revenue for FY11 increased by 60.7% to RM1.17 billion from RM728.16 million a year ago. Earnings per share were 9.98 sen compared to 10.43 sen.

Sarawak Oil Palms attributed the increase in both revenue and profit to higher production and sales of CPO and palm kernel as well as from trading activities.

For the fourth quarter ended Dec 31, 2011, net profit 11.1% to RM43.32 million from RM48.74 million, due to lower CPO and palm kernel prices compared to a year ago. This was despite a 47.5% increase in revenue to RM313.57 million from RM212.59 million.



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Malton’s 2Q earnings down 48% to RM7.18m as projects completed yr ago

KUALA LUMPUR (Feb 24): Property developer MALTON BHD []'s earnings fell 48.3% to RM7.18 million in the second quarter ended Dec 31, 2011 from RM13.90 million a year ago due to the completion of various projects.

It said on Friday, its revenue decreased 28.8% to RM77.74 million from RM109.29 million. Earnings per share were 1.72 sen compared to 3.99 sen a year ago.

Malton attributed the decline in profit and revenue to its Amaya Saujana and Mutiara Indah projects which were being completed.

However, other on-going projects such as Bukit Rimau, V Square, Amaya Maluri and Mutiara Residence contributed positively to its earnings.

For the first half ended Dec 31, 2011, revenue dipped 0.6% to RM177.02 million from RM178.07 million. Net profit fell marginally to 0.8% to RM19.29 million from RM19.45 million.



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Moody’s: TM’s ratings unaffected by RM1.073 bn capital repayment

KUALA LUMPUR (Feb 24): Moody's Investors Service said there was no impact for the A3 issuer and senior unsecured ratings of TELEKOM MALAYSIA BHD [] (TM) after it announced a RM1.073 billion capital repayment to shareholders via a share reduction.

The international ratings agency said on Friday the ratings outlook remains stable.

The proposed capital repayment of about RM1.073 billion would be implemented by reducing the par value of each TM share from RM1 to 70 sen per share. The capital repayment will be funded through TM's existing cash balances of RM4.213 billion as of Dec 31, 2011.

Nidhi Dhruv, a Moody's analyst, and lead analyst for TM said: "The capital repayment is consistent with TM's commitment to periodically return surplus cash to shareholders, in the absence of further capex needs or investment opportunities.

“Although, this will weaken cash flow metrics, TM's overall credit profile remains adequate for its rating level given the cash flow generating capabilities of its core business, manageable capex, and relatively low leverage.”

TM's operational performance for 2011 was in line with expectations, and the company exceeded all its headline KPIs. TM achieved a growth of 12.3% on-year in broadband subscribers, supported by increasing High Speed Broadband (HSBB) take-up of over 20% with 230,000 customers.

In 2011, TM also set up a RM2.0 billion Islamic medium-term notes (IMTN) programme, issuances under which have increased reported total debt to RM6.4 billion as of December 2011, resulting in higher Debt/EBITDA of 1.8 times, compared with 1.6 times a year ago.

"However, the company has no material near-term maturities and benefits from a long-dated debt maturity profile. It can sustain a slightly higher leverage at the current rating level because of the relative stability of cash flow, its dominant market position, largely assured access to domestic capital markets, and expected support from the government of Malaysia,” added Dhruv.

TM is the largest fixed-line telecommunications operator in Malaysia. It holds about 98% of the fixed-line market and 93% of the broadband market (excluding hotspot customers) by subscribers.



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