SingTel – CIMB

Lower guidance on 1HFY13 miss

1H13 core net profit missed CIMB and consensus estimates by 3% and 10% respectively as Bharti disappointed. SingTel maintains its overall guidance but has lowered Optus’sFY13 revenue, citing competition and reduced mobile-termination rates.

DPS was 6.8cts (62% payout of 1HFY13), unchanged yoy. 3QFY13 is likely to be weaker due to higher iPhone-related subsidies. We maintain our Underperform and SOP-based target price pending its conference call later this morning. Likely de-rating catalysts are earnings disappointments and adverse regulatory developments in India.

Amobee losses dragged down Singapore

Singapore met expectations, with EBITDA up 2.1% yoy. EBITDA would have risen 4.7% if start-up losses from Amobee were excluded. SingTel continued to gain mobile market share up, 0.7% pt qoq. It also continued to dominate fibre broadband, capturing 58% of net adds.

Optus a little below forecast, lowers guidance

Optus’s revenue was a little below our forecast, with 3Q being key to FY13’s performance. Its 2QFY13 4.2% yoy fall in revenue mainly resulted from a 5.1% decline in mobile revenue. Incoming mobile revenue slid 13.1% yoy, due to a well-known fall in mobile-termination rates. However, outgoing mobile revenue also fell 1.7% from a 10% decline in postpaid ARPU, led by dilution from mobile broadband. Mobile margins continued to climb as SACs fell and, we think, with better network utilisation from mobile data. Revenue from the two other businesses declined with a 7.5% yoy fall in EBITDA for the consumer division. With mobile dominating, Optus’s 2Q13 EBITDA was flat yoy. However, it has lowered its revenue outlook from low-single-digit growth to a low-single-digit decline though it maintained its guidance of stable EBITDA.

Bharti disappointed

Most of SingTel’s associates beat our expectations except for Bharti, which came in 29% below as D&A and interest expense surprised.

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