RAM reaffirms Digi’s AAA/Stable/P1 sukuk ratings
KUCHING: RAM Ratings has reaffirmed the AAA/ Stable/P1 ratings of Digi Telecommunications Sdn Bhd’s (Digi) RM5 billion Islamic MTN Programme (2017/2032) and RM1 billion Islamic CP Programme (2017/2024), which are subject to a combined limit of RM5 billion.
The ratings reflect Digi’s well-established position in the mobile services industry, excellent profitability and robust cashflow.
On top of Digi’s strong standalone credit strength, the ratings have also considered its close relationship with its ultimate shareholder, Telenor ASA, a Norway-based telecommunication services provider with a 49 per cent interest in the company.
Being part of the Telenor group that has 183 million subscribers and operations in nine countries, Digi enjoys economies of scale through coordinated corporate procurements and the sharing of best practices.
Digi is considered one of Telenor’s key investments; the company accounted for a respective 11 and 14 per cent of Telenor’s revenue and operating profit before depreciation, interest and tax (OPBDIT) in the first nine months of 2019 (9M19).
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Despite stiff competition, Digi has remained the biggest mobile operator in Malaysia by subscribers – a position it has maintained since 2016, with 11.3 million users as at endSeptember 2019.
In addition, it has the second highest share of the market’s OPBDIT despite having a lower share of revenue, thanks to an industry-leading margin that reflects its lean operations and cost efficiency.
“Digi commands the biggest base of prepaid subscribers in the industry. However, its mix of prepaid and post-paid subscribers had changed to 74:26 as at end-September 2019 as the Company had expanded its base of post-paid users, which tend to be more sticky and contribute higher average revenue per user.
“As the market matures, industry players are seeking new growth areas such as the enterprise segment. Telecommunication companies are increasingly positioning themselves as digital companies, offering services typically rendered by technology firms,” highlighted Davinder Kaur Gill, RAM’s cohead of Infrastructure and Utilities Ratings.
THE Malaysian rubber market closed higher yesterday, supported by firmer guidance from regional rubber futures markets, said a dealer.
He said the bullish sentiment was sparked after Brent crude oil price surged more than US$70 per barrel amidst Middle East tensions over the US strike.
On Jan 3, the US killed a top Iranian general, triggering fears of a conflict in the crude-rich region.
At press time, benchmark Brent crude oil jumped 2.33 per cent to US$70.20 per barrel.
“Furthermore, it was reported that the Tokyo Commodity Exchange (TOCOM) rubber contract for June delivery started the year on a positive tone on Monday,” he said.
THE Kuala Lumpur Tin Market (KLTM) ended US$250 lower at US$16,840 per tonne yesterday, on sluggish demand for the metal and in line with the lower tin price on the London Metal Exchange (LME).
A dealer said the tin price closed US$425 lower at US$16,770 per tonne.
“On the local front, bids stood at 24 tonnes and offers at 19 tonnes, while total turnover was higher at 19 tonnes from 15 tonnes recorded last Friday,” he added. Market participants comprised traders from China, South Korea, Japan, Taiwan, Europe, Pakistan and Bangladesh. The price differential between the KLTM and the LME was at a premium of US$70 per tonne from a discount of US$105 per tonne last Friday.