Axiata’s FY22 earnings came in above expectations at RM1601.0m which MIDF said exceeded its consensus projections, accounting for 125.2% and 137.1% of the respective full-year FY22 earnings predictions. With the exception of Dialog and Ncell, higher-than-expected earnings in 4QFY22 were ascribed to better EBITDA across all OpCos.
Axiata posted higher 4QFY22 normalised EBITDA of RM3.4b, was up +10.9%yoy and +5.3%qoq, with EBITDA margin remaining consistent at +3.2%ppts yoy and +3.5%ppts qoq, due to contributions from all OpCos except Dialog and Ncell. The normalised PATANCI for the Group improved by 20.7%yoy from RM1.3b in FY21 to RM1.6b in the same period this year. The positive growth was mainly contributed by most of its OpCos which shows its resiliency in this financial year.
Main asset, Celcom’s revenue ex-device decreased by -3.7%yoy in FY22 attributable to the one-month lesser contribution compared to FY21 post deconsolidation. EBITDA increased +9.2%yoy due to operational excellence. EBIT increased by +63.3% while PATAMI rose by +43.2% or RM1.35m, on the back of higher EBIT which was partly offset by higher Cukai Makmur taxes in 2022.
Since earnings exceeded expectations, MIDF said it revised its forecasts for FY23F upward by +3% as the earnings
outlook across most of the Opcos remains robust and introduced estimates for FY24F. New revised target price is RM4.54
(previously RM4.61), which was derived by pegging revised FY23 EPS of 28.4sen against a lower PER of 16.0x.
The lower PER is to account for higher interest rates, global chip supply shortages, and macro headwinds especially in Sri Lanka, Bangladesh, and Nepal which potentially impacted the Group earnings. All in, we are maintaining BUY on Axiata with a
revised TP of RM4.54.
