M1

M1: weak 4Q11 results, below consensus expectations.
Total revenue increased to $317m, +21% yoy, +29% qoq, due to strong eqpt sales associated with the iPhone 4S launch. Mobile service revenues however were flat yoy and qoq at $147m.
EBITDA disappointed at $73m, -4% yoy, -9% qoq, with margins at 38.5% (-220bps yoy, -360 bps qoq), reflecting higher subscriber acquisition cost (“SAC”, +48% qoq), both due to seasonal promos in the festive season, but also impacted by the launch of iPhone 4S.
This resulted in net profit of $38m, flat yoy, -9% qoq.

Operating metrics overall were weak. Monthly net adds were seasonally weak at +2k. Total ARPU declined by 6% yoy, and were 3% below JPM estimates, mainly due to data.

M1 declared a final div of 7.9cts, translating to a payout ratio of 80%. Full yr div amounts to 14.5cts, lower than last yr’s 17.5cts which included a 3.5 cts special div. Div yield is 5.7% based on last close at $2.56.

Mgt guided for stable overall performance for 2012, and highlighted that growth in wireless data and fixed broadband could be offset by declining roaming revenues amidst a weak backdrop. Div payout guidance remains unchanged at 80%. Capex guidance for 2012 at $110-130m due to planned upgrades to billing systems.

Citi keeps at Buy, lowers TP to $2.88 from $2.90.
MS keeps at Overweight with TP $3.
UBS keeps Neutral rating and TP $2.48.
JPM/ CIMB keep at Neutral, both with TP $2.50.
Deutsche maintains Sell, lowers TP to $2 from $2.06 to reflect weaker operating trends.