Maxis 2Q17 net profit rises 17.6%

By ALIFAH ZAINUDDIN

Maxis Bhd — Malaysia’s largest cellular operator based on market capitalisation — recorded a 17.6% increase in net profit for the second-quarter ended June 30, 2017 (2Q17), despite a saturated market and intense competition for market share.

The company’s net earnings for the quarter also rose to RM574 million from RM488 million, while turnover climbed 3.3% to RM2.17 billion compared to RM2.1 billion posted in the previous year’s corresponding period.

The mobile network provider declared a single-tier tax-free dividend of five sen a share.

In a financial filing to Bursa Malaysia yesterday, Maxis stated that its postpaid revenue was up 2% for the quarter under review to RM998 million from RM978 million posted in the corresponding quarter in 2016.

The increase was attributed to the group’s base of 1.9 million customers with monthly average revenue per user (ARPU) of RM120.

Meanwhile, prepaid revenue jumped 2.9% to RM984 million in 2Q17 from RM956 million in 2Q16, driven by a threefold increase in subscription of 1.8 million subscribers with ARPU of RM44.

Higher Internet penetration in the country has enabled Maxis to end the quarter with 5.6 million 4G LTE (fourth-generation long-term evolution) users, up from 3.5 million last year.

The telco group, owned by tycoon Tan Sri Ananda Krishnan, has since invested RM373 million in capital expenditure for the first-half of the year (1H17) to ensure customer satisfaction in mobile streaming, in line with growing data consumption in the country.

For the cumulative six-month period of 2017, the group’s net profit was 10% higher at RM1.1 billion versus RM1 billion last year. Revenue for 1H17 also grew 2.4% to RM4.3 billion from RM4.2 billion.

Maxis CEO Morten Lundal said in a statement that the 2Q was a quarter with many positives as the group posted strong financials, in addition to posting an all-time high customer satisfaction score.

“Our priority is to continue to deliver a great network experience and create an unmatched customer experience across all channels. This will only get better with our ambitions for a full digitalisation and we are on track towards this,” he added.

Moving forward, the group anticipates service revenue, absolute earnings before interest, tax, depreciation and amortisation, as well as base capital expenditure to remain at similar levels to 2016.

Since June 7 this year, the company lost RM3.7 billion in market capitalisation due to high borrowings.

As of March 31, total borrowings stood at RM9.58 billion, with non-current liabilities making up the majority at 94.7%, or RM9.07 billion, and current liabilities at RM510 million.

Last month, Maxis said it will issue 300 million new shares in the company as part of a private placement exercise geared towards the repayment of borrowings.

The company said the private placement will allow it to raise funds expeditiously and attract more local and international institutional investors, while the book-building process will allow efficient price discovery and competitive pricing based on investors’ demand.

The fundraising exercise, expected to be completed by the end of this month, will be listed on the Main Market of Bursa Malaysia Securities Bhd upon approval.

Maxis shares ended seven sen, or 1.26%, to RM5.49 lower, with 1.7 million shares changing hands, giving it a market capitalisation of RM42.9 billion.