CelcomDigi 4Q net profit soars to RM435.11 mln

KUALA LUMPUR: CelcomDigi Bhd’s net profit jumped to RM435.11 million in the fourth quarter (4Q) ended Dec 31, 2023, against RM127.36 million in the same period a year earlier.

In a filing with Bursa Malaysia yesterday, the telecommunications service provider attributed its higher earnings mainly to lower depreciation following the reduction in the fair value of net assets in the final assessment of the purchase price allocation exercise during the quarter.

Meanwhile, revenue for the quarter increased to RM3.27 billion from RM2.18 billion previously, driven by increased device sales and service revenue.

For the full year (FY2023), CelcomDigi’s net profit jumped to RM1.55 billion from RM848.03 million in the previous year as revenue surged to RM12.68 billion from RM6.77 billion, mainly driven by higher device sales and higher service revenue.

“The growth in service revenue of 0.4 per cent to RM10.86 billion was attributed to higher revenues from prepaid and home fibre segments, alongside the expansion of the subscriber base. Postpaid segment was impacted by the reduction of interconnect rate effective March 2023, despite being cushioned by better roaming activities,” it said.

On the outlook for 2024, CelcomDigi said it would remain steadfast in expediting the network integration and modernisation initiatives.

“A transformative journey for its operating models is underway, placing emphasis on operational excellence and prioritising customer experience. Consequently, higher integration costs are expected,” it added.

Barring unforeseen circumstances and the uncertain impact from 5G dual network implementation, CelcomDigi expected its service revenue to record a low single-digit increase with capex-to-total revenue ratio of 15 per cent to 18 per cent.

In a press statement, CelcomDigi said it has successfully achieved all first-year integration milestones in 2023 enabling the company to realise gross synergy of over RM300 million in FY2023.

CelcomDigi completed 35 per cent of its network integration and modernisation target, ahead of its initial plan of 30 per cent by end 2023.

The company has also modernised over 5,600 sites as of December 2023, enabling customers in post-consolidation areas to now enjoy improved download speeds by between 20 per cent and 26 per cent, and better signal strength by between 13 per cent and 16 per cent, it said.

In the fourth quarter last year, CelcomDigi had invested RM1.01 billion in capital expenditure (capex), bringing total capex to RM1.75 billion, translating into a capex intensity of 13.8 per cent in FY2023.

CelcomDigi chief executive officer Datuk Idham Nawawi said the company made significant progress integrating many business areas, achieving this with minimal disruption to customer experience while competing effectively to lead in the market.

“This solid market execution and operational excellence enabled us to deliver a strong performance and shareholder value in line with our FY2023 guidance,” he added.

CelcomDigi declared a fourth interim dividend of 3.5 sen per share or a FY2023 total dividend of 13.2 sen per share, in line with its progressive dividend commitment to shareholders.