Digi posts Rm356mil profit

4.5 sen interim dividend declared for the third quarter

KUALA LUMPUR: Digi.com Bhd posted a net profit of Rm356.05mil in the third quarter ended Sept 30, 2019 (Q3), which was 9.3% less than in the previous corresponding quarter on the back of lower revenue.

Total revenue for the quarter came in at Rm1.56bil or 2.34% lower than in the same quarter last year.

Digi’s board of directors declared a third interim dividend of 4.5 sen per share for the quarter.

The telco said in a statement yesterday that earnings before interest, tax, depreciation and amortisation (EBITDA) stood at Rm725mil or 46% margin, and it remains geared for profitable growth.

It added that strategic investment to expand its network capacity and coverage activated data growth opportunities in the quarter.

“Internet revenues increased 10.8% yearon-year (y-o-y) to 64.0% of service revenue or RM905 million, where y-o-y post-paid and prepaid internet revenues climbed 19.1% and 2.0% respectively.

“Data traffic volumes surged 49% y-o-y, across a larger base of 9.4 million internet customers using an average 12.9GB of data monthly per customer,” it said.

Digi’s operational cash flow stood at Rm606mil or 39% margin after an additional Rm119mil planned capex in Q3, bringing cumulative capex to Rm548mil for network enhancements.

Net debt to EBITDA ratio stood at 0.8 times while conventional debt over total assets were reduced to 13%, within the syariah threshold.

Digi’s service revenue slipped y-o-y to Rm1.46bil in Q3 versus RM1.47 in the same quarter last year.

Postpaid revenue climbed 12% y-o-y to Rm717mil while postpaid Internet revenue rose 19.1% y-o-y to Rm498mil. Prepaid revenue slid 11.38% y-o-y to Rm740mil amid a continued decline owing to a structural shift in the prepaid revenue mix. Average revenue per user for postpaid and prepaid was RM71 and RM29 respectively.

Meanwhile, Digi’s CEO Albern Murty noted that “we have stayed focused on delivering our strategy this quarter and see that our efforts connect more Malaysians on our services. We will be persistent in providing affordable, widespread connectivity to more people and businesses while we run our business efficiently.

Staying focused on introducing innovative products to the market and making inroads into the B2B segment are part of our longterm growth strategies.”

Aminvestment Bank said it was maintaining its “hold” rating on the telco and had, among others, slightly lowered Digi’s FY19– 21 forecast earnings by 1%–2% as its nine months FY19 came in largely within the bank’s expectation but below consensus.