NERATELECOMMUNICATIONS LTD
N01.SI
Neratel -1Q16 Results Flash Note
Highlights
- 1Q16 NPAT dropped 33.4% YoY, mainly due to sales declines in both Network Infrastructure and Payment Solutions business segments.
- Both top-line and profitability were also impacted by delays in a significant order from a customer and also a pull back in project implementation due to slow payment by a customer. However, all this will likely be completed and recorded in Nera's 2Q16 numbers.
- Gross profit margin improved slightly from 33.5% to 34.1% YoY mainly due to lower proportion of equipment sales.
- Telecom segment: Revenue up 45.7% YoY due to increased revenue from SEA & other regions including Middle East and Africa.
- Network Infrastructure segment: Revenue down 19.5% YoY due to lower sales of network equipment to the Service Provider market. There was a delay in a significant order from a customer and also a pull back in project implementation due to slow payment by a customer.
- Payment solutions segment: Revenue down 35.1% YoY due to lower sale of point-of-sale terminals in Thailand.
Our View
- We remain Neutral on Neratel with a DCF-backed TP of SGD0.55 and make no changes to our earnings estimates.
- Management remains convicted of an improvement in the subsequent quarters and cited that the weaker set of 1Q16 results is mainly due to delays in a significant order from a customer as well as a pull back in project implementation due to slow payment by a customer.
- In addition, they are also in talks to sell its payment solutions business which could be a positive share price catalyst in the near-term.
Jarick Seet
RHB Research
|
http://www.rhbinvest.com.sg/
2016-05-10
RHB Research
SGX Stock
Analyst Report
0.55
Same
0.55
