Maxis Q1 results within expectation: Alliance Research

Alliance Research has maintained its "neutral" call on Maxis Bhd, with a target price of RM6.70, after the mobile operator posted RM476 million for the first quarter ended March 31, 2013.

The quarterly net profit, which was within the expectations of most analysts, accounted for about 22 per cent of the consensus full-year estimates.

Maxis, the country's largest mobile operator, also registered a 4.4 per cent revenue growth. This was mainly driven by higher data revenue and outright device sales. This offset the slight reduction in voice and short message services (SMS).

"After recording a decent first quarter financial year 2013 results, Maxis reiterates its revenue growth guidance of mid-single digit in 2013, with earnings before interest, taxes, depreciation and amortisation (EBITDA) margin sustaining at 48.0 per cent to 48.5 per cent," said Alliance Research in a research note today.

Yesterday, the company announced that it will be investing heavily on 4G network expansion this year.

The company, which spent RM899 million in capital expenditure (capex) to upgrade its IT infrastructure last year, is expected to be spending RM1 billion in capex this year. From the amount, about 75 per cent, or about RM750 million, will be used to for its 4G network expansion.

"Mobile penetration rate is now 142 per cent. The industry is growing but it is very competitive with more players now. Having said that, there is room for growth in the market. We are expecting a single-digit growth driven by non-voice revenue.

"We are starting to see positive operating indicators from the third quarter of last year and this is trending positively. Growth for Maxis will be driven by non-voice or mobile Internet," chief financial officer Nasution Mohamed said yesterday.

The company also registered an earnings before interest, tax, depreciation and amortisation (EBITDA) of RM1.122 billion, up 5.4 per cent than the preceding quarter. EBITDA margin improved by 2 percentage points to 48.2 per cent.

Overall, Maxis continued to lead the market, with a 14.1 million mobile subscriber base.

It also declared a first interim dividend of 8 sen per share amounting to RM600 million.

At 4:04pm, the company's shares were traded marginally higher at 0.14 per cent at RM6.98, with 4.77 million shares traded.