Saturday February 25, 2012
Maxis: No more additional debt market funding in FY12
By DANIEL KHOO
KUALA LUMPUR: Maxis Bhd does not intend to source additional funding from the debt capital market in its financial year ending Dec 31, 2012 (FY12), according to chief financial officer Nasution Mohamed.
The company which had its RM2.45bil worth of sukuk with a maturity of 10 years approved by the Securities Commission last week said it needed the additional funding as a part of its “active capital management,” according to Nasution.
The mobile phone service provider, however, did not rule out raising additional funds from the equity markets in FY12.
On a related matter, Maxis' chief executive office Sandip Das said the company expected capital expenditure (capex) costs to be reduced to “less than RM1bil” because most of its infrastructure was already technologically ready.
Das said the Malaysian mobile phone market was matured and saturated with stiff competition amongst other operators and that it had to continually upgrade its infrastructure to keep up with the times.
The company is already eyeing the next frontier of growth in the data market the Long Term Evolution (LTE) spectrum which will enable its customers to surf at actual fourth generation (4G) speeds.
“LTE is the real deal for 4G. Our less than RM1bil capex allocation for FY12 does not factor in the LTE upgrade for our infrastructure because the Government has not awarded the licence yet,” Das told journalists yesterday.
“Should the Government award it, which we expect by this year, then our capex will be increased accordingly,” Das added.
Maxis announced yesterday that its fourth-quarter year-on-year net profit ended Dec 31, 2011 rose by 47.5% to RM900mil but revenues declined instead to RM2.27bil from RM2.31bil previously.
The divergence in net profit and revenues was due to a one time gain in the “last mile broadband tax incentive of RM352mil comprising RM223mil in respect of prior years and RM129mil for the current year,” the notes to its financial statements said.
Not including part of these last-mile tax incentives which had mostly been booked in its fourth quarter for FY11, Maxis recorded a 9% decline in year-on-year quarterly profit before tax to RM760mil.
For FY11, meanwhile, Maxis had recorded a 10% increase in net profit to RM2.53bil compared with FY10 due mainly to these tax incentives which had reduced its taxation by about half to RM473mil.
Should these not be factored in, its FY11 profit before tax would be reduced by 4% to RM3bil on the back of slightly decreased revenues to RM8.8bil from RM8.87bil in FY10.
Maxis has declared a fourth interim dividend of 8 sen and proposed a final dividend of 8 sen per share, subject to shareholders' approval.
The payout of these dividends will reduce RM1.2bil from its coffers.
The management also said that it had no plans to declare a special dividend as speculated by the market as it wanted to use the money raised from the recent RM2.45bil sukuk to repay its debts, capex and to bolster its working capital.