- NetLink NBN Trust (SGX:CJLU)'s FY23 revenue and EBITDA were within expectations, at 101%/103% of our FY23e forecasts. A diversion revenue spike of 130% y-o-y in 4Q23 surpassed our expectations.
- - Read this at SGinvestors.io -
- The new fibre rates NetLink can charge its customer is expected to be announced soon. Our base case is that fibre rates will be nudged marginally lower. Any impact on dividends is muted due to the ability to raise borrowings.
- Our FY24e EBITDA forecast for NetLink is raised by 2% and DCF-based target price for NetLink is nudged up to S$0.87 (previously S$0.85). The distribution yield is sustainable from stable operating cash-flows and access to financing.
The Positive
Of the S$7.5mil improvement in revenue, $4.7mil is from diversion.
- - Read this at SGinvestors.io -
- Increased construction activity will speed up the completion of new homes and will aid in residential fibre connections.
The Negative
Extra capex and interest expenses jump.
- Read more at SGinvestors.io.
