(April 23, RM4.49)
Maintain hold with an unchanged target price (TP) of RM4.80: Adjusting for the effects of Malaysian Financial Reporting Standards 16 (MFRS 16), DiGi.Com’s first quarter ended March 31, 2019 (1QFY19) results were in line with our/consensus expectations. Revenue trends were soft but offset by margin expansion.
DiGi reported earnings before interests, taxes, depreciation and amortisation (Ebitda) of RM806 million (+4% year-on-year [y-o-y]; +9% quarter-on-quarter [q-o-q]) and net profit of RM342 million (-12% y-o-y; -10% q-o-q) for 1QFY19. MFRS 16 (leases) took effect this quarter, raising Ebitda by RM83 million and lowering net profit by RM24 million. Reversing the impact of MFRS 16, its 1QFY19 adjusted Ebitda of RM723 million was 24% and adjusted net profit of RM366 million was 23% of our/consensus full-year forecasts respectively — in line. A first interim dividend per share of 4.3 sen was declared.
Our FY19/FY20/FY21 net profit forecasts have been revised by -5%/-3%/-1% respectively. — Maybank IB Research, April 23