Celcom’s FY19 earnings more than double on cost savings

The telco plans to focus on cost optimisation and operational excellence in 2020 with smart investments

By S BIRRUNTHA / Pic By RAZAK GHAZALI

LOWER operating costs helped Celcom Axiata Bhd to more than double its profit after tax and minority interest (PATAMI) to RM789 million in the financial year ended Dec 31, 2019 (FY19) from RM301 million recorded the year prior.

“Celcom’s cost optimisation achieved savings of RM283 million through (the lower operating cost) implementation across its internal operations,” the group said in a statement yesterday.

However, revenue for the year fell 8.6% to RM6.71 billion from RM7.34 billion the year before due to the negative impact of lower domestic interconnect, domestic roaming rates and lower device sales, data from Celcom’s parent, Axiata Group Bhd, showed.

Its Ebitda also improved by 7.8% to RM2.1 billion as a result of focus centred on profitable products with the best value.

Capital expenditure for the year decreased by 3.6% to RM1.02 billion from RM1.06 billion previously, as per Axiata data.

Average revenue per user (ARPU) for Celcom’s postpaid segment was flat year-on-year (YoY) at RM86, while prepaid ARPU rose to RM36 from RM35 as at end-2018.

Postpaid revenue for FY19 stood at RM2.55 billion, up 6.3% YoY against a flat subscriber base.

The telecommunication company (telco) ended the year with 2.96 million postpaid subscribers, down from 2.99 million in FY18.

Its prepaid subscriber base also shrank to 5.41 million in FY19 from 6.09 million as at end-2018.

Total subscribers stood at 8.37 million as at December last year, against 9.08 million in 2018. In FY19, the telco said it focused more on profitable segments rather than on device sales, as smartphone penetration rose to 84% in FY19 due to stronger device sales push.

For its fourth quarter ended Dec 31, 2019, the group’s PATAMI stood at RM247 million, against a loss of RM219 million the year earlier.

Quarterly revenue slipped 9.9% to RM1.72 billion from RM1.91 billion registered a year before.

Moving forward, the telco plans to focus on cost optimisation and operational excellence in 2020 with smart investments towards providing the best digital infrastructure and services.

This includes enhancing network infrastructure at lower operational costs, while exploring new areas for growth with new innovative product packages and services within the first half of 2020.

“We will drive growth from enterprise and home segments with exciting new innovative products including gaming and virtual reality (VR) entertainment.

“For enterprise, we will continue to pursue collaborations with the right technology partners and platform providers to deliver high-quality end-to-end Internet of Things solutions and applications to small and medium enterprises, corporations and government customers in Malaysia,” Celcom CEO Mohamad Idham Nawawi (picture) said.

The telco will also leverage the increased adoption of artificial intelligence (AI) applications and robotic process automation for both internal processes and customer facing processes.

Earlier this year, the group embarked on its 5G journey in Langkawi, Kedah, where it conducted the exploration of seven real 5G use cases using 5G technology and AI solutions.

This was in collaboration with various local authority agencies such as Langkawi’s Royal Malaysian Police and Langkawi Municipal Council, with the aim of enhancing daily operations via 5G technology.

The telco also collaborated with the Petaling Jaya City Council in the adoption of 5G technology to enhance daily operations concerning traffic management and public safety by other local councils.