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Malaysian Reserve
4 days ago
- Business
- Malaysian Reserve
Nestcon revises RM211.7m property JV plan, delays diversification into development
CONSTRUCTION firm Nestcon Bhd said its proposed diversification into property development will take more time and is being revised. In a filing with Bursa Malaysia today, the company said it will amend the terms of its joint venture with Kumpulan Wilayah Sejati Sdn Bhd for a RM211.7 million serviced apartment project, citing the need for further due diligence on the two parcels of land involved. The company said revised details related to the JV and diversification plan will be announced later. The draft circular to Bursa Malaysia will be submitted once the updated proposal is finalised. Shareholder approval is required for Nestcon to formally diversify into property development. Separately, Nestcon is proceeding with a RM15.1 million related-party acquisition of three office units in its Nest 2 Residences project in Puchong, which will serve as its new corporate headquarters. The projects will be funded via internal funds and bank borrowings. Draft circulars for the acquisition will be submitted separately to Bursa Securities. — TMR
New Straits Times
16-05-2025
- Business
- New Straits Times
Analysts expect Axiata's core earnings to remain subdued until FY2027
KUALA LUMPUR: Analysts are projecting subdued core earnings per share (EPS) for Axiata Group Bhd in the financial years 2025 and 2026, citing anticipated losses from XLS following its consolidation with Smartfren and costs related to merger integration. According to CIMB Securities, Axiata's EPS is expected to only exceed pre-merger levels by the financial year 2027 (FY27), as the group begins to realise the full benefits of synergies stemming from the merger. "Nevertheless, we have kept our 'Buy' rating with a 19 per cent lower target price (TP) of RM2.60 post earnings revision and lowering Edotco's enterprise value to earnings before interest, taxes, depreciation, and amortisation (EV/EBITDA) target multiple to 8 times from 10 times (-22 sen). "We see potential asset monetisation initiatives in the next 12 to 18 months as a re-rating catalyst," it said. CIMB Securities stated that based on an enterprise value of US$3.5 billion or RM15.1 billion, Edotco is reasonably valued at a financial year 2024 (FY24) EV/EBITDA multiple of 8.4 times. It said after accounting for a pro forma net debt of RM4.6 billion at end-FY24, which includes expected proceeds from the pending US$150 million sale of Edotco Myanmar (EMM), the estimated equity value comes to RM10.5 billion. "Thus, Axiata could receive RM6.6 billion in cash (72 sen per Axiata share) for its 63 per cent stake. If entirely used to repay debt, we estimate interest cost savings of RM218 million, which will largely offset the removal of Edotco's earnings contribution," it added. The firm said Axiata's ability to pay dividends per share (DPS) could increase to 12.3 sen in FY26, compared to its current estimate of 10.5 sen. This potential increase is mainly due to lower interest payments on Axiata's holding company (HoldCo) debt, which are expected to more than offset the loss of relatively small dividends from Edotco, estimated at RM32 million to RM83 million between FY25 and FY27. "In turn, this may result in Axiata raising its DPS from FY26, a year ahead of our expectations. Balance sheet-wise, HoldCo debt may fall from RM9.5 billion at end-FY24 to just RM1.4 billion by end-2025, with group net debt/EBITDA at 1.0 times. Alternatively, Axiata could also pay out part of the sale proceeds in the form of a special DPS," CIMB Securities said. The firm has updated its FY25-FY27 core net profit forecasts for Axiata based on the operating companies' 2024 results and recent mergers, including the Dialog-Airtel merger completed in June 2024 and the XLS merger in April 2025. It also factored in the structural shift in Indonesia, with Link Net's B2C business transferring to XL in the third quarter of 2024. "Post revisions, we now forecast Axiata's core net profit (from continuing and discontinuing operations) to decline 49 per cent year-on-year (YoY) to RM439 million in FY25 and then recover by 71 per cent YoY to RM750 million in FY26, albeit still remaining below the FY24 level (RM852 million). "We only expect Axiata's core net profit to climb above pre-XLS merger levels in FY27, with a further 68 per cent YoY growth to RM1.26 billion," CIMB Securities added.
