Maxis posts highest net profit in four years
CEO says 2017 a strong year with many proud highlights
PETALING JAYA: Telecommunications firm Maxis Bhd posted the highest full-year net profit in four years for the financial year ended Dec 31, 2017 (FY17) on the back of improved earnings before interest, tax, depreciation and amortisation (EBITDA).
Net profit for FY17 rose 8.89% to RM2.19bil compared to the previous corresponding period, while revenue was 0.97% higher at RM8.69bil.
The company said in a statement that normalised EBITDA grew by 2.1%, reflecting higher revenue and positive results from cost-optimisation initiatives, while the EBITDA margin from service revenue was strong at 53.9% against 53.2% last year.
Chief executive officer Morten Lundal said that 2017 was a strong year with many proud highlights.
“We gained further market share both in revenue and profits. We developed our superior 4G LTE (long-term evolution) network to be unparalleled in quality as the best and fastest data network in the country,” he said.
“Overall, our customers enjoy a combination of lots of quality data, attractive products and great connectivity. We are most of all proud to record the highest customer satisfaction we have ever seen.
“We are on track towards our ambition for full digitalisation of Maxis. All in all, a strong finish to a great year,” Lundal added.
Service revenue for FY17 continued to grow positively in a declining market, up 0.8% to RM8.52bil compared with the previous corresponding period, supported by strong growth in postpaid and integrated services.
Postpaid delivered a year-on-year growth of 4.2% with a revenue of RM4.11bil.
“This was mainly driven by growth in subscription base, with high and stable average revenue per user (Arpu).
“Our flagship MaxisONE Plan has now surpassed two million subscribers, contributing a high monthly Arpu of RM117,” the company said.
Prepaid revenue declined by 3.7% to RM3.85bil on a lower subscription base.
“This was a result of aggressive price competition, prepaid-to-postpaid migration and SIM consolidation in the market.
“We continued to focus on retaining and growing our quality subscribers, in particular high mobile Internet users.
“Hotlink FAST subscriptions grew to more than two million with a sustained high and stable Arpu of RM43 per month,” it said.
For the fourth quarter ended Dec 31, 2017, the company posted a 10.69% rise in net profit to RM559mil although revenue for the quarter declined 2.89% to RM2.15bil.
Capital expenditure (capex) for the quarter under review decreased by RM66mil to RM382mil mainly due to the completion of network modernisation.
Free cashflow for the quarter was at RM476mil, compared to a net cash outflow of RM611mil in the preceding year’s corresponding quarter mainly due to higher capex payments and upfront spectrum fees of RM817mil paid in the fourth quarter of 2016.
AmInvestment Bank Research, which has a “hold” recommendation on the stock, said postpaid’s share of service revenue had progressively expanded, accounting for 54% in the fourth quarter versus 48% in FY15.
“Hence, the growth of this segment will have a larger relative impact on the group’s prospective earnings,” it said.
“Maxis’ overall subscriber base has fallen by two million since the second quarter of 2015, wholly from the prepaid segment with no end in sight yet for the haemorrhage.
“Nevertheless, migration to the postpaid segment has driven MaxisOne subscription by 80,000 quarter-on-quarter to 2.1 million in the fourth quarter, underpinned by its best-of-class customer experience and service connectivity,” it added.