Maxis’ 1HFY17 results surpasses expectations

KUCHING: Maxis Bhd’s ( Maxis) first half of financial year 2017 (1HFY17) results have generally surpassed or come in within analysts’ expectations, but some have projected that the group could see weaker quarters ahead.

In a media release filing on Bursa Malaysia, Maxis announced that the group’s normalised profit after tax has gone up 9.5 per cent to RM998 million in 1H17 from RM911 million in 1H16.

According to AmInvestment Bank Bhd (AmInvestment Bank), Maxis’ 1HFY17 normalised net profit appeared to be above expectations, accounting for 54 per cent of the research firm’s and 52 per cent of street’s FY17F earnings.

Meanwhile, Maxis’ 1HFY17 financial performance came in within the research arm of MIDF Amanah Investment Bank Bhd ( MIDF Research) and consensus expectations, accounting for 51 per cent and 52 per cent of full year FY17 earnings estimates respectively.

As for the group’s 1HFY17 dividend of 10sen per share, AmInvestment noted that this was within market expectations and management’s payout policy of 75 per cent.

Maxis’ 1HFY17 dividend of 10sen also came in within MIDF Research’s and consensus expectations, accounting for both 50 per cent of FY17 full year dividend of 20sen per share.

Moving forward, AmInvestment Bank expected subsequent quarters to be weaker due to lower data roaming revenues in tandem with the termination of Maxis’ 3G radio access network arrangement with U Mobile Sdn Bhd in stages over an 18-month period ending on December 27, 2018.

“As a comparison, 1H earnings averaged at 53 per cent for FY14FY16,” the research firm said.

On another note, MIDF Research highlighted that the revamped MaxisONE plan, which offer better value proposition, has continued to show good traction as the postpaid subscriber base continues to increase steadily.

This, however, negatively impact the postpaid average revenue per user (ARPU) as the research arm viewed that the postpaid subscribers will be incline to sign-up the entry level postpaid plan.

“On the contrary, prepaid ARPU continue to grow at a steady pace as Hotlink Fast subscribers increase their data usage.

“Nonetheless, due to intense competition, the prepaid subscriber base continues to dwindle,” it said.

In 2HFY17, MIDF Research viewed that it would be difficult for Maxis to grow the prepaid revenue as the research arm expected Webe to disrupt the prepaid market.