Cory Diary : Netlink BNB Trust H1 FY24 Review

Currently, the business growth is peaking and there is no major catalyst. It has a Resilient business model. And a declared 1H DPU of 2.65 cents. A slight increase.

Most key question is the DPU sustainable ? If we look at below chart it appears they are paying out slightly more than they earn. The returns probably matches on the expectation of market returns for investing in the company with little upsides and rising costs. So technically it can last for years even in losses but this also mean is not healthy for investment in critical infrastructure which the country needed in coming future.

The NetLink Group has a stated policy to distribute 100% of its cash available for

distribution on a semi-annual basis.

Net Gearing 21.5%. Do note that is different definition from Reits Gearing Ratio.

Weighted average number of units (‘000) in issue for calculation of basic and

diluted earnings per unit 3,896,971 

Cash and bank balances 178,378,000. Reduction roughly 11M from previous comparison 1H.

The business return may need to be adjusted upwards to ensure they are confident enough to invest for future needs while ensuring DPU returns align to inflation to make it viable long term. This is especially so where we need to layout key infra on long term planning.

Cory

2023-1103

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