NLT NBN’s 1QFY19 revenue came in at S$86.1m, outperforming its forecast by 2.8%, mainly due to higher diversion revenue and ducts and manholes service revenue, while installationrelated revenue continued to be lower than previously forecasted.

Total expenses of S$69.8m was 2.2% lower than forecasted on the back of lower installation costs, depreciation and amortisation expenses, staff costs and finance costs. The Trust Group achieved a PAT of S$19.0m, which was 26.9% higher than its forecast.

As at 30 June 2018, there was a 2.1% QoQ increase in both the number of residential and non-residential end-user connections, while NBAP connections increased by 35.2% QoQ. The Trust Group expects to deliver on the FY19 projected distribution as per its prospectus.

Pending an analyst briefing this morning, we maintain our BUY rating but place our fair value of S$0.90 under review.

Source: OCBC Research - 6 Aug 2018