Tuesday March 1, 2011
By JEEVA ARULAMPALAM
jeeva@thestar.com.my
Cash return makes it a steady preference
PETALING JAYA: Telekom Malaysia Bhd (TM)'s proposed capital distribution of 29 sen per share has been viewed positively by telecommunication analysts, as TM returns excess cash from the disposal of non-core assets such as the sale in Measat Global Bhd shares.
In conjunction with its full-year 2010 results release last Friday, TM said it wanted to carry out a capital distribution to its shareholders of some RM1.04bil, or 29 sen per RM1 each, in line with its capital management framework to return excess cash to shareholders and given its strong cash position as a result of disposal of non-core asset.
According to the company's year to date accounts ending Dec 31, total gains of RM366.6mil were made from the disposal of Measat and Axiata Group Bhd shares.
TM also proposed a final gross dividend of 13.1 sen per share, on top of its interim gross dividend of 13 sen last September.
“Post capital distribution and final dividend distribution, TM's balance sheet is expected to remain solid due to its huge cash balance of RM3.5bil or 97.56 sen per share,” Kenanga Research said in a report yesterday.
A foreign research analyst covering TM said the capital distribution was sufficient, considering the company's commitment to dividend returns of RM700mil or up to 90% of normalised profit after taxation and minority interests.
Meanwhile, Inter-Pacific Research Sdn Bhd said that TM's financial year 2010 gross dividend total of 21.6 sen with a 29 sen per share capital distribution made it a steady preference.
Last September, TM sold 60.02 million Measat shares to Measat Global Network Systems Sdn Bhd for RM252.1mil.
In December, TM said it was looking to dispose off 191.46 million Axiata shares through private placements or the open market, which was estimated to fetch RM879.4mil in total if it sold Axiata shares at RM4.60 per share.
It subsequently managed to place out 90 million from the 191.46 million Axiata shares at RM4.60 per share, making a disposal gain of RM209.7mil.
The last capital repayment from TM to its shareholders was in 2009, as it paid out 98 sen per share or a total of RM3.51bil.
TM came into excess cash then as Axiata (then known as TM International Bhd) paid it some RM4.03bil as part of interest earned on monies according to the demerger agreement between both parties.
HwangDBS Vickers Research said that TM's fourth-quarter 2010 core earnings before interest, taxation, depreciation and amortisation (Ebitda) growth of 7% quarter-on-quarter on the back of a 6% revenue increase was within its expectation.
It added that growth for the present fiscal year's earnings would be driven by growth in the data and broadband segments as broadband demand was expected to remain robust.
“However, we understand that Ebitda margin may be slightly lower this year as the group may incur additional operating costs in rolling out the high-speed broadband,” HwangDBS said.
http://biz.thestar.com.my/news/story.asp?file=/2011/3/1/business/8155108&sec=business
No comments:
Post a Comment