Axiata financial result, proposed dividend of 10sen

• A first DPS of 10sen (32% payout) has been proposed payable after its AGM in 2Q11.
• Celcom has opted to accelerate its USP provision over 3 years compared to 8 years previously which gave rise to the exceptional RM111m charge in its books for 4Q10. Management has guided for another RM79m of the same to booked in FY11.
• Management estimates a RM30-40m negative revenue impact over the next 2 years from the proposed cut in Malaysia and Singapore roaming tariffs. On the re-farming of the 900MHz spectrum, Axiata indicated that negotiations are on-going and the cost to ‘re-farm’ could come in lower than the RM1bn guided previously. It would be significant impact should more than 5MHz of its current 15MHz be re-farmed. 
• On Digi’s aggressive focus on the Malay and youth segments, management said that its target for 2011 would be to capture the urban Chinese and English speaking segments with a new promotion to be launched next month. 
• Celcom expects to maintain voice revenue and EBITDA margin in the mid-40s for FY11.
• FY10 capex came in at RM2.76bn which was below the earlier guidance of RM3.6bn as some spending was deferred into FY11. Of the capex guided for this year, RM900m-RM1bn will be allocated for Celcom, RM1.7bn (XL), Dialog (RM300m) and Robi(RM400m).
• Impairment charge on Idea which contributed to the headline loss in 4QFY10. 
• Target price RM5.83