Maxis 3Q profit hit by prepaid weakness

Prepaid service revenue hit by lower subscriptions impacted by the continued SIM consolidation and migration

By FARA AISYAH / Pic By TMR File

Maxis Bhd noted a fall in its prepaid service segment with its net profit falling to RM513 million in the third quarter ended Sept 30, 2018 (3Q18), from RM564 million recorded a year ago.

Revenue for the quarter dipped 3% to RM2.26 billion from RM2.33 billion in 3Q17, despite growth in its postpaid and home-fibre businesses.

Maxis’ prepaid service revenue declined 10.1% year-on-year (YoY) to RM851 million on the back of a lower subscription base which was impacted by the continued SIM consolidation, migration from prepaid to postpaid and intense price competition.

Its mobile Internet revenue remained high at 58.3% of prepaid revenue, which contributed to the stable and high average revenue per user (ARPU) of RM42.

The mobile operator added that it was supported by its enhanced and expanded use of data analytics for segmental and personalised offerings, which attracted higher data users.

Its postpaid service revenue grew by 2.8% to RM1.03 billion in the period supported by the solid subscription base with 250,000 more postpaid users.

Hotlink Postpaid Flex and MaxisONE Share continue to be strong catalysts driving incremental port-ins of entrylevel postpaid subscribers.

Maxis’ postpaid ARPU moderated marginally to RM93 against a larger subscription base exceeding three million subscribers.

Home – fibre revenue improved 14.3% YoY to RM80 million as subscriber base grew to 202,000 in 3Q18.

The company noted that since its new access arrangements with Telekom Malaysia Bhd was announced in August, it has received over 40,000 signups for new services from existing and new customers.

Data consumption continued to increase with blended data usage almost doubling from a monthly average of 5.6GB a year ago to 10.7GB.

The group maintained its high touch point net promoter score of +57 in the quarter compared to +52 in 3Q17.

Maxis’ normalised pretax earnings declined 6.4% YoY to RM1.05 billion with a margin on service revenue of 51.7% against RM1.12 billion and 53.5% respectively in 3Q17 — which was mainly attributed to the lower service revenue and one time World Cup sponsorship in the quarter. Normalised profit for the quarter declined to RM518 million.

Capital expenditure for the period was 28.5% lower at RM195 million, mainly due to the higher spend on IT (information and technology) transformation in 3Q17.

Free cashflow for the quarter was RM600 million compared to RM428 million in 3Q17, mainly due to working capital changes.

“We’ve had a good quarterly operating performance which was driven by data growth and demand for our innovative offerings from both consumers and businesses,” Maxis CEO Robert Nason noted in a statement yesterday.

“Our performance is tracking ahead of expectations, but we anticipate strong headwinds emerging with the tapering of our wholesale revenue; the impact of the Sales and Services Tax; investment in our new fibre offerings and continued intense price-focused competition,” he added.

The company declared a dividend of five sen in respect of the financial year ending Dec 31, 2018, to be paid on Dec 27, 2018.