KUALA LUMPUR: DiGi.Com Bhd posted a 1% growth in third quarter (3Q) net profit from a year earlier amid higher depreciation and amortisation, and operating expenses which offset the effects of higher sales and larger subscription base during the period.
In a statement to Bursa Malaysia, DiGi said its 3Q net profit came to RM292.45 million or 37.6 sen a share versus RM289.31 million or 37.2 sen a share a year earlier. Revenue increased 13% to RM1.52 billion from RM1.35 billion, driven by mobile data business.
“Mobile data revenue accounted for close to 30% of the group’s revenue base for the first nine months of the current financial year.
“In terms of outlook for the remaining quarter of 2011, the group maintains its target to achieve high single-digit revenue growth. It will also continue to leverage on the success of its on-going cost savings focus to drive further margin improvement,” DiGi said.
Cumulative nine-month net profit climbed 2% to RM860.16 million from RM845.98 million a year earlier while revenue was up 11% to RM4.42 billion from RM3.98 billion. Profit had grown slower than revenue due to accelerated depreciation amounting to RM275 million, amid on-going network modernisation effort and infrastructure sharing arrangement with Celcom. Nonetheless, 9M operating profit before working capital changes rose 15.2% to RM2.23 billion.
As at Sept 30, DiGi’s subscription base expanded to 9.6 million customers from 8.2 million as at end 2010. Average revenue per user (Arpu) however declined to RM50 from RM53 previously.
The decline in Arpu was mainly due to lower spending by new customers, competitive price pressure, and lower domestic interconnect revenue in tandem with the reduction in mobile termination rate effective July 2010, according to DiGi.
DiGi had cash of RM987.15 million as at Sept 30 compared to debt obligations of RM726.68 million. This translates into net cash of RM260.47 million. The company plans to reward shareholders with a third interim tax exempt single-tier dividend of 37 sen a share for the quarter in review. This translates into dividends of RM1.10 a share so far this year.
Looking ahead, DiGi said it had earmarked a capex of some RM800 million for FY12 to spur its revenue growth and cost reduction plans.
While it anticipates that global economic volatility could impact the company’s outlook for the year-ahead, it believes that the telecommunications industry is more resilient than many other industries. This is by virtue of growth opportunities not only in the traditional segments but also in new mobile data business, DiGi said.
In a separate statement, DiGi chief executive officer Henrik Clausen said the company was streamlining its distribution set-up to improve its ability to anticipate and meet customer needs in a high data traffic environment.
“We have also continued to strengthen the foundation of our data network to support future increase in mobile Internet adoption and traffic. Our network modernisation efforts remain a high priority for the company and we aim to further improve our capability in the areas of coverage, capacity, quality and efficiency to support mobile data growth by putting in place a brand-new long-term evolution-ready network by the end of 2012,” he said.
This article appeared in The Edge Financial Daily, October 25, 2011.
In a statement to Bursa Malaysia, DiGi said its 3Q net profit came to RM292.45 million or 37.6 sen a share versus RM289.31 million or 37.2 sen a share a year earlier. Revenue increased 13% to RM1.52 billion from RM1.35 billion, driven by mobile data business.
“Mobile data revenue accounted for close to 30% of the group’s revenue base for the first nine months of the current financial year.
“In terms of outlook for the remaining quarter of 2011, the group maintains its target to achieve high single-digit revenue growth. It will also continue to leverage on the success of its on-going cost savings focus to drive further margin improvement,” DiGi said.
Cumulative nine-month net profit climbed 2% to RM860.16 million from RM845.98 million a year earlier while revenue was up 11% to RM4.42 billion from RM3.98 billion. Profit had grown slower than revenue due to accelerated depreciation amounting to RM275 million, amid on-going network modernisation effort and infrastructure sharing arrangement with Celcom. Nonetheless, 9M operating profit before working capital changes rose 15.2% to RM2.23 billion.
As at Sept 30, DiGi’s subscription base expanded to 9.6 million customers from 8.2 million as at end 2010. Average revenue per user (Arpu) however declined to RM50 from RM53 previously.
Clausen: Our network modernisation efforts remain a high priority.
The decline in Arpu was mainly due to lower spending by new customers, competitive price pressure, and lower domestic interconnect revenue in tandem with the reduction in mobile termination rate effective July 2010, according to DiGi.
DiGi had cash of RM987.15 million as at Sept 30 compared to debt obligations of RM726.68 million. This translates into net cash of RM260.47 million. The company plans to reward shareholders with a third interim tax exempt single-tier dividend of 37 sen a share for the quarter in review. This translates into dividends of RM1.10 a share so far this year.
Looking ahead, DiGi said it had earmarked a capex of some RM800 million for FY12 to spur its revenue growth and cost reduction plans.
While it anticipates that global economic volatility could impact the company’s outlook for the year-ahead, it believes that the telecommunications industry is more resilient than many other industries. This is by virtue of growth opportunities not only in the traditional segments but also in new mobile data business, DiGi said.
In a separate statement, DiGi chief executive officer Henrik Clausen said the company was streamlining its distribution set-up to improve its ability to anticipate and meet customer needs in a high data traffic environment.
“We have also continued to strengthen the foundation of our data network to support future increase in mobile Internet adoption and traffic. Our network modernisation efforts remain a high priority for the company and we aim to further improve our capability in the areas of coverage, capacity, quality and efficiency to support mobile data growth by putting in place a brand-new long-term evolution-ready network by the end of 2012,” he said.
This article appeared in The Edge Financial Daily, October 25, 2011.
