Latest news with #RM1.8bil
The Star
19-05-2025
- The Star
Italy's museum visitors exceed population for first time in 2024
In Italy, the ancient Colosseum in Rome was the most visited attraction, with 14.7 million ticket holders, followed by the Uffizi Gallery in Florence with 5.3 million and the archaeological site of Pompeii with 4.3 million. Photo: AFP Italy's top cultural sites drew more than 60 million paying visitors in 2024, surpassing the country's population for the first time. The ancient Colosseum in Rome was the most visited attraction, with 14.7 million ticket holders, followed by the Uffizi Gallery in Florence with 5.3 million and the archaeological site of Pompeii with 4.3 million. Tourists from Italy and abroad contributed more than €382mil (RM1.8bil) in revenue to the Italian state, with the Colosseum alone bringing in over €100mil (RM483mil). Italy has about 59 million residents and is home to more than 400 state-run museums. The number of visitors rose by two million compared to the previous year, while revenue increased by €68mil (RM329mil) partly due to higher ticket prices. Not included in the figures are the Vatican Museums - home to the Sistine Chapel, where Pope Leo XIV was recently elected - which belong to the independent Vatican City. With more than six million annual visitors, the Vatican Museums would rank second if counted among Italy's attractions. - dpa
The Star
08-05-2025
- Business
- The Star
CelcomDigi's capex to modernise its IT systems
RHB Research said CelcomDigi is committed to delivering steady-state pre-tax merger synergies of between RM700mil and RM800mil from FY27. PETALING JAYA: RHB Research expects CelcomDigi Bhd's stronger commercial execution and realisation of merger synergies to drive a re-rating of the stock, even as the group steps up investment in information technology (IT) system upgrades that will raise near-term costs. Following an engagement with the group, the research house was guided that the bulk of CelcomDigi's financial year ending Dec 31, 2025 (FY25) capital expenditure, estimated at RM1.8bil to RM2bil, would go towards modernising its IT systems. This, it said, was expected to lift operating expenditure (opex) in the short to medium term, largely due to new software licences. 'The higher opex and accelerated depreciation charges for network assets (expected to taper off in FY25 and FY26) are factored into CelcomDigi's FY25 earning before interest and taxes guidance of a low to mid-single-digit growth which also considered higher 5G wholesale charges,' the research house noted. Nevertheless, RHB Research said CelcomDigi is committed to delivering steady-state pre-tax merger synergies of between RM700mil and RM800mil from FY27. To reflect near-term integration cost and delayed savings, the research house adjusted its FY25 and FY26 earnings forecasts down by 6.9% and 8.8% respectively, but kept FY27 broadly intact. Separately, RHB Research highlighted a slight delay in the network integration timeline from mid-2025 to the second half of the year (2H25), citing changes in Digital Nasional Bhd's (DNB) operating model. The shift, it said, is impacting the remaining 25% of sites, or about 4,000 locations, yet to be integrated. According to RHB Research, CelcomDigi expects mobile network operators and shareholders to 'come to a landing' soon with DNB that will result in a revised wholesale framework. The 5G traffic is expected to be shared with U Mobile Sdn Bhd – the second 5G infrastructure provider.
The Star
08-05-2025
- Business
- The Star
Merger synergies to drive CelcomDigi re-rating- RHB
PETALING JAYA: RHB Research expects CelcomDigi Bhd's stronger commercial execution and realisation of merger synergies to drive a re-rating of the stock, even as the group steps up investment in information technology (IT) system upgrades that will raise near-term costs. Following an engagement with the group, RHB Research said it was guided that the bulk of CelcomDigi's financial year ending Dec 31, 2025 (FY25) capital expenditure estimated at RM1.8bil to RM2bil will go towards modernising its IT systems. This, the research house said, is expected to lift operating expenditure (opex) in the short to medium term, largely due to new software licences. 'The higher opex and accelerated depreciation charges for network assets (expected to taper off in FY25-FY26) are baked into CelcomDigi's FY25 earning before interest and taxes guidance of a low-to mid-single digit growth which also factors in higher 5G wholesale charges,' it noted. Nevertheless, RHB Research said CelcomDigi is committed to delivering steady-state pre-tax merger synergies of between RM700mil and RM800mil from FY27. To reflect near-term integration cost and delayed savings, the research outfit adjusted its FY25 and FY26 earnings forecasts down by 6.9% and 8.8% respectively, but kept FY27 broadly intact. Separately, RHB Research highlighted a slight delay in the network integration timeline from mid-2025 to the second half of the year (2H25), citing changes in Digital Nasional Bhd's (DNB) operating model. The shift, it said, is impacting the remaining 25% of sites, or about 4,000 locations, yet to be integrated. RHB Research said CelcomDigi expects the mobile network operators (MNOs) and shareholders to 'come to a landing' soon with DNB that would result in a revised wholesale framework. This is as 5G traffic is expected to be shared with U Mobile, the second 5G infrastructure provider. 'While no discussion has taken place with the latter, CelcomDigi acknowledged that a fresh wholesale agreement inked going forward would be commercially-driven,' RHB Research said. It said the current wholesale structure allows MNOs to exit their existing agreements within 30 days of an alternative 5G network becoming available, or before January 2028 with prior notice. 'This suggests the earliest an MNO could do so would be in 2H26, based on U Mobile's reported rollout timeline,' it said. RHB Research also noted that CelcomDigi views current mobile pricing as suboptimal, given its scale. 'CelcomDigi believes the current mobile plans/pricing are not reflective of its position as the largest MNO by mobile revenue and sub market share, an area that it hopes to address over the medium term with the support of a vastly modernised network, integrated IT platforms, and distribution channels,' it noted. 'On enterprise, management views the lack of fibre assets as an impediment where it is prepared to further invest in the medium term.' Overall, the research house has maintained its 'buy' call on CelcomDigi, raising its target price slightly to RM4.40 from RM4.30 a share. 'We see stronger commercial execution and realisation of merger synergies from the completion of CelcomDigi's network integration driving a re-rating of the stock,' it said, adding that valuation remains undemanding at 8.7 times FY26 enterprise value to earnings before interest, taxes, depreciation and amortisation.
The Star
30-04-2025
- Business
- The Star
Revenue drawback with SST delay
PETALING JAYA: The postponement of the expanded scope of the sales and service tax (SST) is expected to help safeguard economic stability at a time of heightened global uncertainty, say economists. Nevertheless, they cautioned that the move is not without costs, as the delay in implementation could result in a short-term decline in government revenue. UCSI University Malaysia finance associate professor and CME research fellow Dr Liew Chee Yoong pointed out the delay in rolling out a wider scope of SST will 'almost certainly' cause the country to miss at least 'a portion' of the additional RM5bil revenue target initially set for 2025. Liew added that given the deferment will likely push the implementation to September or later, the government will lose roughly one-third of its potential taxable period. 'Assuming a steady rate of revenue collection, this would amount to a loss of about RM1.6bil to RM1.8bil,' he told StarBiz. He said when positioned against the government's total projected revenue of RM339.71bil for 2025, the RM5bil expected from the expansion of the SST scope would have contributed about 1.47% of the total. Consequently, the estimated shortfall of RM1.6bil to RM1.8bil corresponds to about 0.47% to 0.53% of total projected revenue. 'Though numerically small, this shortfall is significant in a context where Malaysia is aiming to reduce its fiscal deficit to 3.8% of gross domestic product (GDP) this year. Even minor setbacks in revenue can have disproportionate impacts on fiscal consolidation targets, making the delay fiscally meaningful,' Liew said. The expansion of the SST scope was announced during the tabling of Budget 2025 last year by Prime Minister Datuk Seri Anwar Ibrahim. Back then, Anwar said the sales tax will be imposed on non-essential items, including imported premium items like salmon and avocado. Further, the service tax will be expanded to include business-to-business commercial transactions, particularly fee-based services, that were previously exempted. On Monday, the Finance Ministry announced that the enforcement of the SST scope expansion, which was slated to take place on May 1, will be implemented at a later date. The gazettement of the new tax changes, which was originally supposed to take place in the first quarter of this year, is now scheduled for June 1. It was noted that nationwide engagements with industries to finalise the scope of the expansion and applicable tax rates have been completed. Last November, the government said it expects to raise an extra RM5bil in revenue by enlarging the scope of the SST. Revenue was projected to hit RM51.7bil from the initiative, up from the forecast of RM46.7bil for 2025. While Liew said the decision to delay the expansion of SST scope is 'justified and strategically sound', he also noted the move is not without costs, though the pros outweigh the cons at least in the short term. 'The delay protects domestic consumption, which is pivotal to economic recovery. It supports overall growth momentum and shields households from the rising cost of living. 'Furthermore, it aligns Malaysia's policy approach with other global economies that are favouring fiscal caution over aggressive revenue measures amidst a fragile recovery,' he said. However, beyond the expected revenue loss, Liew also cautioned that there may be a reputational risk regarding the country's fiscal discipline, as delays may send mixed signals to investors and international credit rating agencies. 'Despite these drawbacks, safeguarding economic stability at a time of heightened global uncertainty is a more critical priority. Thus, the decision reflects a pragmatic balancing of risks where protecting the economy outweighs immediate revenue considerations,' he said. Bank Muamalat Malaysia Bhd head of economics, market analysis and social finance Dr Mohd Afzanizam Abdul Rashid said the postponement of the SST scope expansion should be seen in the context of broader global developments. Specifically, he stated the tariff shocks imposed by US President Donald Trump on April 2 present a challenging prospect, especially for the local manufacturing sector, where more than two-thirds operate in export-oriented industries. 'Already, we have seen major organisations such as the International Monetary Fund and World Bank revise down their global growth forecast including Malaysia's GDP growth this year,' Mohd Afzanizam said. Hence, he is of the view that the deferment of the SST scope expansion reflects the government's pragmatic approach in enacting policy measures by constantly looking at the current economic trajectory in order to arrive at a realistic outcome. Since the expansion of SST scope has been deferred, Mohd Afzanizam said the RON95 subsidy rationalisation plan is expected to go ahead as planned. 'If that is the case, then perhaps the government's fiscal deficit-to-GDP target of 3.8% for 2025 would not deviate much,' he said. Meanwhile, Universiti Tunku Abdul Rahman economics professor Wong Chin Yoong said the brief delay in the enforcement of the SST scope expansion is unlikely to cause the government to miss its target of obtaining the additional RM5bil in revenue. Wong opined the reason for the deferment is probably because the authorities and relevant ministries needed more time to fine tune the details of the SST scope expansion, rather than the uncertainties arising from the US' tariffs. 'If the delay was due to the latter, it would likely extend beyond a month, possibly until after the ongoing 90-day pause, allowing businesses to better assess the impact of the tariffs,' he said. Wong said what is more important at this juncture is the implementation of e-invoicing to ensure the proper and effective rollout of the expanded SST scope. The government has announced a six-month delay for the implementation of Phase 3 of e-invoicing earlier this year, pushing it to Jan 1, 2026, from the initially scheduled date of July 1, 2025. 'The SST scope expansion is not the only aspect that matters when it comes to revenue collection, but it is the e-invoicing system that matters the most,' said Wong. He added that the enlarged scope includes fee-based commercial service provisions, which more often than not are not properly recorded as income revenue by the providers. This will end up becoming part of the informal economy. 'With e-invoicing, every such transaction will be invoiced and submitted to the Inland Revenue Board, enabling the government to better capture the corresponding tax revenues,' he said. To this end, Liew said the country has several viable fiscal strategies to strengthen its financial position, in response to the revenue shortfall created by the delay in the SST scope expansion. One major approach is in enhancing tax compliance. 'The informal and shadow economy accounts for roughly 18% to 20% of Malaysia's GDP. Strengthened enforcement and digitisation initiatives like e-invoicing, could yield between RM3bil and RM5bil annually,' he said. Other recommendations include the introduction of new taxes, public asset monetisation for one-off revenues and the potential reintroduction of a more targeted and progressive form of the Goods and Services Tax (GST-lite). 'Strategic divestments of non-essential government land or government-linked companies could result in one-off revenues of between RM5bil and RM10bil. 'Broader structural tax reforms like GST-lite could be deferred until the nation's economic recovery is firmly anchored, likely post-2026, to minimise shocks to household consumption and business investment,' Liew said.
The Star
29-04-2025
- Business
- The Star
Strong domestic sales to bolster Nestle Malaysia
CIMB Research said it anticipates a gradual recovery in domestic sales, supported by the easing impact of boycotts and new product launches. PETALING JAYA: Given the steady demand for Nestle (M) Bhd 's core products like Maggi instant noodles, Nescafe coffee, and Milo chocolate-flavoured drink, the group's performance in Malaysia is expected to gradually improve over the year supported by recovering consumer sentiment. TA Research said that cocoa and sugar prices had moderated from their peaks, dropping by approximately 4.4% and 11.8% year-to-date, respectively. 'With the pricing adjustments implemented in July 2024 and the easing of input costs for certain commodities, we believe Nestle will be better positioned to manage its costs, leading to potential earnings before interest and taxes margin of 10.5% this year. 'We maintain a 'buy' rating with an unchanged target price of RM100.28 per share, based on dividend discount model (DDM) valuation,' TA Research said in a report yesterday. Nestle posted a core net profit of RM161.2mil in the first quarter of the year (1Q25), which accounted for 34% of both TA's and consensus full-year estimates. The research house said the results were within expectations as 1Q earnings are seasonally high due to the Chinese New Year festival and early Hari Raya sales. Prior to the Covid-19 pandemic, 1Q typically contributed 33% to 37% of full-year earnings, the research house said. The consumer group's revenue rose by 20.1% quarter-on-quarter (q-o-q) to RM1.8bil in 1Q25, supported by stronger sales during the Chinese New Year and Hari Raya festivities plus an increase in export sales. Meanwhile, core net profit rose more than four fold q-o-q, mainly attributed to higher revenue and improved cost management, which led to a 4.2 percentage point q-o-q expansion in gross profit margin to 31% in 1Q25. However, on a year-on-year (y-o-y) basis, 1Q25 core earnings declined by 22.8% despite stable revenue of RM1.8bil. No dividend was declared for the quarter under review. Despite the challenges of commodity-price volatility and softening consumer demand if geopolitical tensions are prolonged, CIMB Research said it anticipates a gradual recovery in domestic sales, supported by the easing impact of boycotts and new product launches. The research house estimated that domestic sales made up about 80% of total 1Q25 sales. 'Meanwhile, export sales are also expected to grow, leveraging Nestle's role as a global halal manufacturing and export hub for the group. While higher commodity prices – particularly for coffee beans and cocoa – could exert pressure on margins, we believe Nestle can mitigate these headwinds via price adjustments, improved sales mix and cost-efficiency initiatives,' CIMB Research said. Underpinned by potentially stronger domestic and export sales, the research house forecasts Nestle's core net profit this year to grow by 23.6% y-o-y, supported by a 7.9% increase in revenue. CIMB Research maintained a 'hold' call on the stock, while lowering its DDM-based target price to RM86.20 from RM92 before. Meanwhile, Hong Leong Investment Bank Research upgraded the stock to 'hold' from 'sell', with an unchanged RM78 target price as it believes the valuation is now 'more palatable' with the share price having depreciated by one-third since the firm's 'sell' rating downgrade last July.
