Berjaya’s Redtone downgraded after 1Q profit misses estimate

29 Sep Berjaya’s Redtone downgraded after 1Q profit misses estimate

Yesterday, Redtone reported a net profit of RM538,000 for the first quarter ended July 31, 2015 (1QFY16) on revenue of RM23.03 million.

As Redtone changed its financial year end from May 31 to April 30, there are no comparative numbers from a year earlier. Redtone, however, indicated that 1QFY16 business performance was weaker “due to delays in the commencement of USP (universal service provision) projects and general weak market conditions.”

Today, Kenanga analyst Cheow Ming Liang said the research firm cut its FY16 Redtone revenue and net profit forecast by 12.5% and 23 % to RM173 million and RM23.5 million respectively.

In a note, Cheow said Kenanga also reduced its target price for Redtone shares to 61 sen from 71 sen.

“Redtone International reported a Patami (profit after tax and minority interest) of RM0.538m in 1Q16, which merely accounted for 1.8% of our former full-year NP (net profit) estimate of RM30.5 million,” Cheow said.

Cheow said Redtone’s income forecast downgrade was “to reflect the latest USP projects’ implementation timeline post the deferment coupled with higher interest cost as a result of higher currency volatility.”

Berjaya Corp Bhd is Redtone’s controlling shareholder with a 51.34% stake.

Redtone shares have not been traded so far today. Yesterday, the stock closed at 65 sen for a market capitalisation of RM489.5 million. – The Edge Markets, September 29, 2015.


Source: The Malaysian Insider

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