NetLink NBN Trust’s (NLT NBN) 4QFY19 exceeded its IPO projections across a number of metrics. Revenue was higher by 0.5% at S$87.9m, due mainly to higher contribution from residential connections revenue and ducts and manholes service revenue.

EBITDA came in higher by 1.6% at S$62.8m, which apart from higher revenues, was also boosted by the lower finance costs and other operating expenses. Consequently, PAT at S$20.0m was 11.7% higher than projection.

NLT NBN has declared a DPU of 2.44 S-cents for 2HFY19, bringing the full-year DPU to 4.88 S-cents, or 5.2% higher than the projected DPU at IPO. Based on 13 May 19’s closing price, this gives an annualised yield of 5.9%.

Pending an analyst briefing, we maintain our BUY rating but place our FV estimate of S$0.90 under review for now.

Source: OCBC Research - 14 May 2019