Digi’s 3Q earnings down 9% to RM356m

The telco’s quarterly revenue decreased to RM1.56b from RM1.6b in July – September 2018 period


DIGI.COM Bhd’s net profit for the third quarter ended Sept 30, 2019 (3Q19), dropped 9.3% year-on-year (YoY) to RM356.05 million compared to RM392.54 million recorded a year ago due to lower revenue.

Its earnings per share for the three-month period was lower at 4.58 sen from 5.05 sen in 3Q18.

The telecommunications company’s (telco) quarterly revenue decreased to RM1.56 billion from RM1.6 billion in the July-September 2018 period.

Digi CEO Albern Murty (picture) said the company has stayed focused on delivering its strategy for the quarter, and sees its efforts to connect more Malaysians on its 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 market and making inroads into the business-to-business (B2B) segment as part of our long-term growth,” he said in a statement last week.

For the July to September 2019 period, Digi reported earnings before interest, tax, depreciation and amortisation (Ebitda) of RM725 million with a 46% Ebitda margin, lower than RM750 million Ebitda and 47% Ebitda margin in 3Q18.

Digi posted RM1.41 billion service revenue in 3Q19, a decline from RM1.44 billion service revenue posted in the same quarter last year.

The telco’s overall Internet subscriber base strengthened to 9.4 million or 82.6%, an increase of 357,000 from a year ago, while data traffic volumes surged 49% YoY and monthly data usage among its subscribers increased to 12.9GB.

Its operational expenses (opex) remained flat YoY and quarter-on-quarter at RM489 million amid strategic investments into Digi’s 4G network capacity and coverage expansions to support increasing 4G subscriber base to 8.7 million or 92.3% of its smartphone users.

Digi’s postpaid base registered another 67,000 postpaid net adds to almost three million postpaid subscribers.

The postpaid average revenue per user (ARPU) rose to RM71 alongside expansion of subscriber base and ARPU uplift from its existing postpaid customers, despite adversely challenged by intense competition in the entry level postpaid segment.

In 3Q19, Digi expanded its reach in offering its prepaid Internet plans and subscriptions to 6.7 million prepaid Internet subscribers, 78,000 higher from a year ago.

Its internet subscribers now represented 79.9% of the 8.3 million prepaid subscribers and have been instrumental in driving solid Internet ARPU uplifts to cushion the revenue dilution from non-Internet subscriber base contraction and steadied prepaid ARPU at RM29 during the quarter.

Digi’s efforts to grow postpaid and strengthened Internet subscribers and usage resulted in 10.8% higher Internet revenue YoY to RM905 million or 64% of service revenue, smartphone adoption to 84.2% alongside increasing data demand and usage.

The Internet subscribers increased to 82.6% of Digi’s 11.3 million subscriber base while ARPU was steady at RM40 with stronger postpaid and prepaid Internet subscriber base.

“In the final quarter of 2019, we will continue to execute and deliver on our growth strategies, especially in driving postpaid, B2B and prepaid Internet growth.

“We will continue to sharpen our focus on structural operational efficiencies, investing in what matters most for our customers and continuously drive value creation for our stakeholders,” Digi noted. The company has declared a third interim dividend of 4.5 sen to be paid on Dec 19, 2019.

Last week, Digi closed five sen or 1.05% lower to RM4.69, with a RM36.47 billion market capitalisation.