Digi’s 1QFY18 net profit within expectations

KUALA LUMPUR: Digi.Com Bhd's (Digi) first quarter of financial year 2018 (1QFY18) net profit was within expectations, resulting in analysts maintaining their FY18 to FY20 foreacst earnings.

As per Digi's management discussion and analysis, the group's profit after tax amounted to RM352 million for 1QFY18, down 5.6 per cent year on year.

Digi's 1QFY18 net profit of RM352 million, which excluded the impact of MFRS 15 came in within expectations, accounting for 25 per cent of AmInvestment Bank Bhd's (AmInvestment Bank) forecast and 24 per cent of consensus expectations.

According to AmInvestment Bank, including the MFRS 15 adoption, which largely affected the accounting treatment of its handset contracts, Digi's net profit increased by 10 per cent or RM34 million to RM386 million, while revenue rose two per cent or RM36 million.

“With a dividend payout of 99 per cent, the group's 1QFY18 dividend per share (DPS) of 4.9 sen appears to be above our currently unchanged dividend assumptions,” it said.

AmInvestment Bank highlighted that the MFRS 15 affects accounting profit recognition but not actual cash.

AmInvestment Bank noted that the group's 1QFY18 earnings before interest, tax, depreciation and amortisation (EBITDA) margin rose three percentage points (ppts) quarter on quarter (q-o-q) to 47 per cent on a three per cent q-o-q operating expenditure (opex) decrease as operation and maintentance fell 17 per cent, traffic cost 12 per cent, material six per cent and sales-marketing five per cent.