KUALA LUMPUR (Feb 27): TIME dotCom Bhd (KL:TIMECOM) shares rose to a six-month high in early trade on Thursday after the group declared a special dividend for its latest quarter as quarterly results largely met expectations.

At the time of writing, TIME dotCom shares gained 4.1% or 20 sen to RM5.08, valuing the group at some RM9.4 billion.

TIME dotCom recently reported that core net profit for the fourth quarter ended Dec 31, 2024, came in at RM77 million, marking a mere 1% year-on-year (y-o-y) increase but a steep 40% quarter-on-quarter (q-o-q) decline.

Revenue rose 2% y-o-y and q-o-q, driven by an increase in retail broadband revenue and an uptick in enterprise revenue on higher cloud-related billings. However, wholesale revenue fell 10% y-o-y and 5% q-o-q.

Maybank Investment Bank attributed the dip in earnings to higher impairment costs, including approximately RM45 million related to submarine cable assets.

Elevated costs also led to a sequential contraction in earnings before interest, taxes, depreciation, and amortisation (Ebitda) margin, which fell 11.4 percentage points to 31.1%.

“With tapering earnings growth, we see a lack of re-rating catalysts in the near term,” Maybank IB cautioned, prompting a 3% downward revision in its FY2025 and FY2026 earnings forecasts.

In a move that surprised analysts, TIME dotCom declared a special dividend, bringing total dividends per share for the quarter to 37.87 sen and full-year payouts to 56.8 sen — a striking 274% payout ratio.

Maybank IB noted that the company’s capital expenditure for FY2024 fell short of expectations due to permit delays in fibre deployment, prompting management to return excess cash to shareholders.

The research house now assumes a 100% dividend payout moving forward, translating to a yield of over 5%.

Among the research houses covering the stock, TIME dotCom has three “buy”, two “hold” and no “sell” calls. Bloomberg’s consensus 12-month target price stands at RM5.45, implying further upside from the current price.