KUCHING: Maxis Communications Bhd (Maxis) is expected to report the fourth quarter of 2010 (4Q10) capital expenditure (capex) spend of RM490 million which is 21 per cent of its revenue, bringing its 2010 capex spending to RM1.4 billion.
UOB Kay Hian (Malaysia) Holdings Sdn Bhd (UOB KayHian) in its research report also expected Maxis to announce a fourth interim dividend per share (DPS) of eight sen and a final DPS of three sen, bringing 2010 net DPS to 35 sen.
This implied a net yield of about seven per cent or nine per cent gross. Moving forward, the competitive landscape in 4Q10 was less aggressive compared with earlier in 2010, when Maxis was in a customer acquisition mode.
Recall that the group dropped the tariff of its entry-level mobile broadband plan in the first quarter of 2010 (1Q10) which resulted in 135,000 net adds in the second quarter of 2010 (2Q10). This slowed down to 76,000 in the third quarter of last year (3Q10).
As of September 2010, Maxis had 35 per cent subscriber share among the big three competitors within the sector, while Celcom led with 54 per cent and late-comer DiGi held 11 per cent.
In view of less aggressive promotions, UOB KayHian expected Maxis’ 4Q10 margin to be firmer quarter-on-quarter versus an earlier expectation of a rather stable earnings before interest, tax, depreciation and amortisation (EBITDA) margin.
This was also driven by seasonal festivities as well as the reduction in post-World Cup 2010 (WC2010) promotions. Consequently, Maxis reported a 51.4 per cent EBITDA margin in 3Q10 versus 46.9 per cent in 2Q10. “We understand that a tail-end RM10 million was spent on post WC2010 promotions in 4Q10,” it said.