Digi earnings up on growth and improved efficiency

Q2 net profit at RM384mil compared with RM358mil previously

PETALING JAYA: Telecommunications outfit Digi.com Bhd registered a 7% higher net profit in the second quarter of financial year 2018, mainly on the back of business growth and improved operational efficiency.

Earnings in the second quarter rose to RM384.34mil from RM358.89mil previously. As for the top line, Digi posted a higher figure in the quarter in review, up by 4.2% year-on-year (y-o-y) at RM1.62bil, as compared to RM1.55bil a year ago.

“The stronger growth and efficiency momentum for the quarter was attributed to the company’s disciplined acquisition quality, strong focus on data adoption and monetisation, digitisation across its businesses and strong management on cost structures.

“This has resulted in a higher postpaid subscriber mix, better quality prepaid base and good traction on new digital innovations,” the group said in a statement.

According to Digi, Internet revenue grew 26.4% y-o-y to RM805mil while data traffic volume surged 73% and average monthly data usage among Internet subscribers soared to 8.2GB.

There was also a pick-up in postpaid plans, which turned in a revenue growth of 15.5% y-o-y to RM619mil, while postpaid Internet revenue rose 32.5% to RM400mil.

In the prepaid segment, growth in prepaid Internet revenue helped to cushion the revenue decline due to legacy prepaid voice and messaging services. Prepaid revenue slipped 5.7% y-o-y to RM865mil.

Average revenue per user (ARPU) in the postpaid and prepaid segments were RM77 and RM32, respectively. The postpaid subscriber base grew 3% to 2.65 million while the prepaid segment continued to see fewer subscribers, shrinking 7%, due to plan conversions to postpaid.

Earnings for the quarter after accounting for MFRS15 and 9 was RM384mil, or 4.9 sen per share. The board has declared a second interim dividend of 4.9 sen per share payable on Sept 28.

Cumulatively, in the first half of financial year 2018, Digi’s earnings increased by 5.25% y-o-y to RM770.45mil. Revenue in the period rose 4.04% y-o-y to RM3.25bil from RM3.13bil a year earlier.

On its prospects for the rest of 2018, Digi said it would continue to improve its service revenue growth development, sustain its earnings before interest, tax, depreciation and amortisation (EBITDA) margin around 46% to 47%, and deliver capital expenditure at 10% to 12% of service revenue.

“With a solid first half-year performance and a sharper focus anchored on connecting our customers to what matters most, we will continue to pursue sustainable growth opportunities ahead.

“Our focus for the next six months will be to step up on growth and efficiencies by strong execution of strategies in focus areas of growth across postpaid and prepaid, leveraging on data-driven insights and customer segmentation, and delivering on cost agenda on a platform of sustainable and efficient cost structure,” it said.