Result report 2010 - CorpBanca Inversiones

Entel
First Quarter 2010 Results
Target Price: CLP 8,150
May 04th, 2010
Entel reported results for the 1Q10, showing a 3.7% increase in EBITDA
compared to 1Q09, reaching CLP 102,945 million. This increase is mainly
explained by better results in the wireline business which increased 18%
and Americatel Peru which grew more than five times last year first quarter.
Recommendation: Buy
Risk: Medium
Positives
Sector: IT and Telecom
Results report
Analyst: Juan Carlos Parra
Overview:
Good
 Regular
Bad
Compared to market consensus:
 Above
In line
Below
Mobile customer base grew 11% supported by a 17% expansion in the
postpaid. In particular, mobile broadband customer base grew 92%
boosting VAS revenues. A better Non Operating result contributed to a
18.3% rise in Net Income.
Negatives
Impact of access charges drop applied in late January 2009 along with
lower revenues related to the enterprise segment in the wireline business.
Exchange rate decline had a negative impact in tariffs of traffic business.
Opinion
We believe Entel’s strategy will continue in line with postpaid customer
base growth along with an expansion of VAS. Next quarter results will not
be affected by access charges decline when compared to year 2009, so
we expect Entel results to better reflect its strategy.
We have a CLP 8,150 target price for Entel as of 2010 YE, with a Buy
recommendation and Medium risk.
Entel: First quarter 2010 results
CLP mn
1Q10
1Q09
Var. %
Revenues
251,311
252,281
Operating income
46,525
42,198
-0.4%
10.3%
Operational margin %
18.5%
16.7%
EBITDA
102,945
99,272
Ebitda Margin %
41.0%
39.3%
Non operating income
(2,345)
(5,132)
-54.3%
Net income
36,934
31,208
18.3%
Net margin %
14.7%
12.4%
EPS
156.2
132.0
3.7%
Source: CorpResearch and Company reports
“El propósito de este documento es sólo informativo y, por consiguiente, no puede entenderse, bajo ninguna circunstancia, que CorpResearch S.A. asuma responsabilidad alguna
en relación a cualquier tipo de operación que un inversionista realice o pretenda realizar respecto de los instrumentos o valores de que se tratan, o en los mercados o situaciones a
que se refiere.”
Glossary
Term
Definition / Translation
Calculation
EBITDA
Earnings Before Interests, Taxes, Depreciation and
Amortization
Operational Income plus Depreciation and
Amortization
EBITDAR
Earnings Before Interests, Taxes, Depreciation,
Amortization and Rents
EV
Enterprise Value
EV/EBITDA
Valuation multiple. While greater it is, more
expensive it is the stock
Operational Income plus Depreciation and
Amortization plus rent of fixed assets. It is used the
at transport industries to reverse the rent of airplanes
or ships.
Market capitalization plus Net Financial Debt plus
Minority Interest
EV divided by Ebitda
FCF
Free Cash Flow
Operational Income plus Depreciation and
Amortization minus tax minus capital expenditures
plus (minus) working capital variation.
Free-float
Percentage of stocks that can be freely traded in the
market
Percentage of stock that does not belong to
controller’s shareholders.
Margin
Operational
Ebitda
Net
Percentage of sales
P/E
Price / Earnings
Market Price divided by EPS
P/B
Price to Book value ratio
Market price divided by the accounting value of the
stock.
Dividend Yield
The return in terms of dividends of investing in
equities
Dividends distributed in a year divided by the market
price.
FCF yield
Free Cash Flow Return.
FCF / Market Price
ROA
Return on Assets
Net Income / Total Assets
ROE
Return on Equity
Net Income / Accounting capitalization
EPS
Earnings Per Share
Net Income / Shares outstanding
YtD
Year to Date
Percentage variation year to date
x
Times
Operational Income / Revenue
Ebitda / Revenue
Net Income / Revenue
Stocks recommendations: these are established according to the stock yield relative to the IPSA. We define a yield to be “In
line with the IPSA” when it is within a range whose scope is equivalent to a third of the variation expected for the index, with a
minimum of 5%. Once that is settled, we recommend Hold, when we expect the share to have a yield in line with the IPSA;
Buy, when the yield expected for the share is above to that expected for the IPSA; and Sell, when the yield expected for the
share is below to that expected for the IPSA.
2
“El propósito de este documento es sólo informativo y, por consiguiente, no puede entenderse, bajo ninguna circunstancia, que CorpResearch S.A. asuma responsabilidad alguna
en relación a cualquier tipo de operación que un inversionista realice o pretenda realizar respecto de los instrumentos o valores de que se tratan, o en los mercados o situaciones a
que se refiere.”
CorpResearch
Álvaro Donoso CorpResearch Director
[email protected]
Economic Research
Sebastián Cerda Economic Studies Director
[email protected]
Juan José Donoso Economic Analyst
[email protected]
Nicolas Birkner Economic Analyst
[email protected]
Equities Research
Cristina Acle Head of Equities Research. Sectors: Forestry and Transport
[email protected]
Juan Carlos Parra Analyst. Sector: Mining, Foods, IT and Telecom
[email protected]
Rosario Letelier Analyst. Sector: Energy and Construction
[email protected]
Gutenberg Martínez Analyst. Sector: Retail and Banks
[email protected]
Francisco Yazigi Analyst.
[email protected]
Communications
Antonia de la Maza Communications Editor
[email protected]
Rosario Norte 660 Floor 17, Las Condes, Santiago, Chile. Telephone: (562) 660 3600
www.corpcapital.cl - Bloomberg: CORG <GO>
3
“El propósito de este documento es sólo informativo y, por consiguiente, no puede entenderse, bajo ninguna circunstancia, que CorpResearch S.A. asuma responsabilidad alguna
en relación a cualquier tipo de operación que un inversionista realice o pretenda realizar respecto de los instrumentos o valores de que se tratan, o en los mercados o situaciones a
que se refiere.”